Reporting Indian Tribal Distributions

*For tax year 2014

Reporting Tribal (per capita) distributions on your 2014 tax return

Note to Tribes: ITG encourages you to include this article when sending Tribal members their Form 1099-MISC.

If you are a member of a federally recognized tribe, you may receive taxable distributions from your tribe. The tribe must report these distributions to the IRS and to you on Form 1099-MISC.

If you are expecting a refund, correctly preparing your 2014 federal tax return may help avoid refund delays. Please make sure that you include information from your Form 1099-MISC when you file.

Follow these instructions when filing your 2014 federal income tax return:

• Use Form 1040; not Form 1040A or Form 1040EZ
• On Form 1040, line 21, enter the amount of tribal distributions from Form 1099-MISC, Box 3
• On Form 1040, line 21, include a description of the income in the space provided on Line 21
• To avoid processing delays, enter one of the following descriptions on Line 21:
  • INDIAN GAMING PROCEEDS
  • INDIAN TRIBAL DISTRIB
  • NATIVE AMERICAN DISTRIB
• Spell the descriptions exactly as listed above. These descriptions facilitate the processing of your tax return. For example, if you spell out DISTRIUBTION rather than using DISTRIB, the IRS may reject your return and delay your refund.

If you receive a letter requiring a response from you, respond to the letter in a timely manner. Do not ignore it. While the correct descriptions shown above are important, it is crucial you respond timely to any letter requesting your response.

Some letters do not require a response. These are called notices. Notices are sent by the Internal Revenue Service to inform you of the length of time your refund is expected to be delayed.

The IRS’s hard work to protect taxpayers from fraud and identity theft may delay refunds for Tribal members. All tax returns are subject to the refund fraud and identity theft filters. There are NO exceptions.

Although this diligence has affected everyone, ITG has gotten involved and the IRS has made strides in streamlining refunds. With automated processes and your following the guidelines in this article, the number and length of delays should be reduced.

FOR STATE FILINGS IN COLORADO

https://www.colorado.gov/pacific/sites/default/files/NativeAmericansReservationIncome.pdf

Income Tax - Native American Tax Subtraction

Is a Native American Indian subject to Colorado income tax on their income?

Income earned by a Native American Indian is usually subject to Colorado taxes just as it would be
for any other taxpayer. However, there is an exception for income if it is earned:

• on the Indian Reservation, and
• by a reservation tribal member (enrolled member) while domiciled on the reservation. This

income can be subtracted from taxable income on the “Other Subtractions” line of Form 104
as qualified reservation income. This would include casino winnings if won in a casino
located on the reservation on which the tribal member resides when the income is received.
Other income earned off the reservation by the taxpayer will still be subject to Colorado tax.
Income earned by a Native American Indian or on a Native American Reservation that is
subject to Colorado tax includes:

• income earned on a reservation by anyone not living on that reservation,
• income earned by a reservation member while working off the reservation,
• income earned by a tribal member on a reservation other than the reservation to which they
belong and reside,
• income earned by a taxpayer who is not a Native American Indian even if they live and/or work
on a reservation.

When claiming the qualified reservation income you must submit the following supporting
documentation to the department:
 a copy of the tribal card
 proof of residency on the reservation
 proof of employment on the reservation. 


FOR COLORADO STATE TAXES

Line 1: Taxable Income: after deductions, after exemptions, before amt
Line 4: Same as Line 1
Line 12:  ALL INCOME made