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Level 1
posted Mar 5, 2023 1:07:11 PM

S-Corp in Virginia with partner residing in NC - how to create NC K-1?

I prepare the taxes for an S-Corp that resides and does all it's business in Virginia. I am a partner and reside in NC. When I fill out my personal tax return, TurboTax Home and Business 2022 expects me to have an NC K-1, but TurboTax Business 2022 did not give an option to create an NC K-1.

 

How do I create an NC K-1 in TurboTax Business? Did I miss a question that triggers creating the  NC K-1?

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1 Best answer
Expert Alumni
Mar 7, 2023 6:42:16 AM

As @PatriciaV mentions you do not need to create a NC K1.  The NC K1 is only for entities that conduct business in NC to report/file in NC.  As you mention the partnership is in VA and only conducted business in VA so correctly you generated the VA K1s.  

 

As for your personal returns TurboTax Home and Business is asking for K1 information from the Federal K1 and if you had a NC K1 then TurboTax tells you where to find the information on that form.  You can put $1 in boxes 2 and 3 to generate follow on pages to see the list of potential additions/subtractions from NC income.  Then, if your K1 has some of these amounts you can include them in the appropriate box, otherwise be sure they are blank.     

3 Replies
Expert Alumni
Mar 6, 2023 9:06:50 AM

No, you would not receive a NC Schedule K-1 from a business located in Virginia. This would happen only if the S-Corp had NC income and filed a NC State income tax return.

 

You may wish to review your entry of the K-1 in TurboTax to be sure you didn't give a NC address for the K-1 by mistake.

Level 1
Mar 7, 2023 3:07:34 AM

My address is in North Carolina, therefore the federal K-1 and Virginia VK-1 list my NC address. What do you mean by "You may wish to review your entry of the K-1 in TurboTax to be sure you didn't give a NC address for the K-1 by mistake"?

 

TurboTax Home and Business 2022 assumes that a NC K-1 has been created.  Are you saying that TurboTax should not assume/expect a NC K-1?

Expert Alumni
Mar 7, 2023 6:42:16 AM

As @PatriciaV mentions you do not need to create a NC K1.  The NC K1 is only for entities that conduct business in NC to report/file in NC.  As you mention the partnership is in VA and only conducted business in VA so correctly you generated the VA K1s.  

 

As for your personal returns TurboTax Home and Business is asking for K1 information from the Federal K1 and if you had a NC K1 then TurboTax tells you where to find the information on that form.  You can put $1 in boxes 2 and 3 to generate follow on pages to see the list of potential additions/subtractions from NC income.  Then, if your K1 has some of these amounts you can include them in the appropriate box, otherwise be sure they are blank.