FAQs for Indian tribal governments regarding individuals: Filing requirements


These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information required to respond to general inquiries. Due to the uniqueness and complexities of Indian law and federal tax law, it is imperative to ensure a full understanding of the specific question presented, and to perform the requisite research to ensure a correct response is provided.

Are individual Indians subject to federal income taxation?

An Indian tribe, and any unincorporated business owned by the tribe, are not entities subject to federal income tax. They are not included in IRC section 1 (individuals, trusts, or estates), or IRC section 11 (corporations).

Are there any exemptions for individual Indians from federal income taxation?

Yes. There are several:

  • Income derived from a fishing rights-related activity under IRC section 7873.
  • Income directly derived by an Indian allottee from restricted allotted land that is held in trust by the United States government.
  • Income from land claim settlements and judgments.
  • General Welfare benefit payments under IRC section 139E.
  • Certain payments made pursuant to the Per Capita Act.

Are some types of distributions nontaxable?

Yes.  There are certain kinds of income (distributions) received by Indians that Congress has elected not to tax. One of the most important is income from individually allotted land that remains held in trust by the federal government. This income applies to rents and royalties, as well as income from sale of crops or minerals from the land (see Revenue Ruling 56-342, 1956-2 C.B.20 PDF). Gain from the sale of livestock raised on allotted trust land has also been ruled exempt (see Revenue Ruling 62-16, 1962-1 C.B. 7 PDF).

What are the requirements for income to be exempt by an Indian allottee from restricted allotted land held in trust by the United States government?

Income will be recognized as exempt where each of the following tests is met:

  • The land in question is held in trust by the U.S. government;
  • Such land is restricted and allotted and held for an individual non-competent Indian, and not for a tribe;
  • The income is derived directly from the land;
  • The statute, treaty, or other authority involved shows congressional intent that the allotment be used as a means of protecting the Indian until such time as he becomes competent; and
  • The authority in question contains language showing congressional intent that the land, until conveyed in fee simple to the allottee, is not subject to taxation.

What happens when an Indian receives fee title to the land?

Once an Indian receives a fee title to the land, the exempt status of income derived directly from that land ends and is subject to federal income taxation.

What are my filing requirements if I own a business?

The filing requirements for business owners depend upon the type of business (sole proprietorship, partnership, corporation, S corporation). Also, if you have employees, you are required to file employment tax related returns. Listed below are common forms and due dates businesses are subject to:

Business/tax type THEN use Filing due date
Sole proprietorship Form 1040 PDF and Schedule C PDF April 15
Partnership Form 1065 PDF April 15; for fiscal year partnerships the return is due on the 15th day of the fourth month after close of the tax year
Corporations Form 1120 PDF (corporation)

Form 1120-S PDF (S corporation)

March 15; for fiscal year corporations the return is due on the 15th day of the third month after close of tax year
Self-employment tax Schedule SE PDF April 15, filed with 1040 and Schedule C or C-EZ
Estimated tax (sole proprietor business) Form 1040-ES PDF Quarterly — April 15, June 15, September 15, January 15
Social Security and Medicare taxes and income tax withholding on employee’s wages Form 941 PDF Form 941 — quarterly, deposits due dependent upon tax liability, refer to Publication 15, Employer’s Tax Guide PDF, for detailed information
Providing information on social security and Medicare taxes and income tax withholding Form W-2 PDF (to employee)
Form W-2 PDF and Form W-3 PDF (to the Social Security Administration)
Provide to employee by January 31
Provide to Social Security Administration by February 28 (March 31 if filed electronically)
Federal unemployment Tax (FUTA) Form 940 PDF January 31
Filing information returns for payments to nonemployees and transactions with other persons Form 1099-MISC PDF Provide to recipient by January 31
All 1099-MISC forms with payments in box 7 (non-employee compensation) are due to the IRS by January 31. File other paper Forms 1099-MISC with the IRS by February 28 (March 31 if filed electronically).

When must I file my individual income tax return?

April 15th each year is the due date for filing your federal individual income tax return. Your return is considered filed timely if the envelope is properly addressed and postmarked no later than April 15th. If the due date falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day.

If you cannot file by the due date of your return, then you can request an extension of time to file. However, an extension of time to file is not an extension of time to pay. You will owe interest on any past-due tax and you may be subject to a late-payment penalty if payment is not made timely. To receive an automatic 6-month extension of time to file your return, you can file Form 4868, Application for Automatic Extension of Time to File PDF by the due date of your return. For more information, refer to the Form 4868 instructions.