K-3

[sos21]

Turbox Tax will not let me file my 2021 tax return because I have checked the partnership has a K-3.  How can I file my tax return now until the K-3 issues are resolved by the IRS,

[PatriciaV]

It depends. For some taxpayers, the IRS has announced that most K2/K3 reporting for 2021 can be delayed until the 2022 tax return. If your K-1 does not report foreign activities for Schedule K-3, you can uncheck the box (14 on 1120S, 16 for 1065) and e-file now. 

However, if your K-1 does report foreign activities, you are required to include Schedule K-3. You have the option to uncheck the box, e-file now, and amend your return later. Or you can file an extension and check back later in the year to see if Schedule K-3 is available.

Please note that the issuance of a K2/K3 is not a Turbo Tax issue, it is a IRS issue. According to the IRS, these are the release dates for these forms, based on type of Business Entity.

Form 1065                        March 20, 2022

Form 1120-S                     Mid-June 2022

Form 8865                        January 2023

For more info, see this IRS link.

[davidtayar]

today is March 20 so when will TurboTax Have the k-3 for us? It’s really not cool that TT doesn’t give an update even if just to say sorry you’re on your own 

[nanlehn079]

Where do I find K-3?  You say its ready to do

[PatriciaV]

Even though the IRS planned to release Schedule K-3 for Form 1065 on March 20, 2022, the form may not have been released on time and/or has not been integrated into the software yet. Please continue to run SmartCheck each day to see if the form is available in TurboTax. If you are using the desktop version, be sure to run updates from the Online menu before you do the review.

[ScottHB]

TT's handling of this issue is entirely inept.  There should be a notification when filling in tax info and especially when trying to file as to how to deal this issue may be handled - or at worst a link to an explanation rather than needing to hunt it down.

[JamesG1]

The IRS announced on February 16, 2022 that most K-3 reporting for 2021 can be delayed until the 2022 tax return filing, but they have not indicated how individual taxpayers should proceed.  

This is an extract of the IRS announcement:

"The IRS intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders.  The IRS will provide full details of this relief soon."

Some are choosing to "uncheck" the box indicating that a K-3 is attached so that you can electronically file now.  But in that case, you may need to amend your tax return at a later time.  

See also this IRS FAQ.

@ScottHB 

[JamesG1]

The IRS announced on February 16, 2022 that most K-3 reporting for 2021 can be delayed until the 2022 tax return filing, but they have not indicated how individual taxpayers should proceed.  

This is an extract of the IRS announcement:

"The IRS intends to provide certain additional transition relief for this year from the Schedule K-2 and K-3 reporting for certain domestic partnerships and S corporations with no foreign activities, foreign partners or shareholders, and without knowledge of partner or shareholder need for information on items of international relevance. For 2021, these qualifying domestic partnerships and S corporations will not have to file the new schedules. We are taking this step in response to feedback we received from the tax community and our stakeholders.  The IRS will provide full details of this relief soon."

Some are choosing to "uncheck" the box indicating that a K-3 is attached so that you can electronically file now.  But in that case, you may need to amend your tax return at a later time.  

See also this IRS FAQ.

@ScottHB 

[CryptoEther10]

I am not exempt from filing the K-3. I want to avoid paper filing because it is lengthy and challenging. The IRS states it is available for e-file after 3/20. When will TurboTax update their software?

[lorijo125]

The IRS website states the K-3 may be filed as a PDF. Is TurboTax going to make this available? This FAQ was posted on Feb. 16, 2022.

. May these schedules be filed electronically and what is the timeline? (added February 16, 2022)

• Yes, these schedules are currently available to be electronically submitted.  However, Modernized e-File (MeF)/Extensible Markup Language (XML) electronic filing capability for the schedules K-2 and K-3 for tax year 2021 will not be available as of the beginning of the 2022 filing season (January 2022).  Schedules K-2 and K-3 will be available for MeF/XML filing in the following time frames.  If you electronically file your return before the time frames, submit the schedules as separate PDF files attached to the return.   Taxpayers will also be able to file their Schedules K-2 and K-3 via PDF attachments for the entire 2022 filing season.

[lorijo125]

James, thank you for following this. I found the following on the IRS website. Do you know if there is a way within Turbo Tax to attach a pdf of the K-3 (1065)?

. May these schedules be filed electronically and what is the timeline? (added February 16, 2022)

• Yes, these schedules are currently available to be electronically submitted.  However, Modernized e-File (MeF)/Extensible Markup Language (XML) electronic filing capability for the schedules K-2 and K-3 for tax year 2021 will not be available as of the beginning of the 2022 filing season (January 2022).  Schedules K-2 and K-3 will be available for MeF/XML filing in the following time frames.  If you electronically file your return before the time frames, submit the schedules as separate PDF files attached to the return.   Taxpayers will also be able to file their Schedules K-2 and K-3 via PDF attachments for the entire 2022 filing season.

[JamesG1]

Currently, there is no ability to upload a PDF file.

I am receiving a 'Page Not Found' message when I click the hyperlink.  Is there another link?

[lorijo125]

When I tried to copy/paste, this web forum said I could not attach a link.  I've tried to copy it as text.  It is on the page below under item "#7: May these schedules be filed electronically and what is the timeframe?"

irs.gov/businesses/schedules-k-2-and-k-3-frequently-asked-questions-forms-1065-1120s-and-8865 

[fred1986]

I have a client that has Box 16 checked and no K-3 provided (until maybe August). Line 21 of the K-1 is blank and there is nothing in Lines 20AG and 20AH5. The taxpayer is a domestic filer from NJ.

Do I really need to wait for the K-3 to file his return or can I simply uncheck Box 16 and file?

By unchecking Box 16, would the only downside be that the taxpayer wouldn't get any foreign tax credit, if any?

[clnewha1]

Patricia,  

The schedule K 3 I am waiting for will not come till end of August 31. 2022. I'm not sure if I am required to include it or not when filling.  Where on the K 1 does it show it does report foreign activities? Also we can file now without it and amend it later when we receive the schedule K 3?