Schedule K-1 says attached K-3, but not received yet. Schedule K-1 FAQ says I don't have to attach K-3 to file my taxes. IRS says I do. Any advice?

[fulton610]

My provider (Schedule K-1 FAQ) says K-3's are available by 8/31/2022 but that it's not required to be attached to my US federal return.  I want to file now and not wait.  IRS website says it's required to be attached if provided 30 days prior (3/16)  to filing due date (4/15).

[MinhT1 · Accepted solution]

Most forms K-2 and K-3 forms do not need to be filed this year.

The IRS announced on Tuesday February 15, 2022 that most K2/K3 reporting for 2021 can be delayed until the 2022 tax return filing.

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.

[fulton610]

Thanks.  I intend to "uncheck" the box indicating that a K-3 is attached so I can file now and will add the K-3 to my files for 2022 return if and when it shows up.

[santanu]

How should I handle the same situation? In Line 16 mention no K-3 attached and proceed with E-file. Once K-3 is available how should we attach it to the return? Do we need to file an amended return? 

[AliciaP1]

Until the IRS releases more information about how they will handle the filing of these forms, we cannot give you any information about how to handle an already filed 2021 return or future returns.

@santanu

[santanu]

Thanks a lot @AliciaP1  for your prompt response. Just to clear my situation:

1. I have not yet filed my 2021 return.

2. I have a K-1 form which has an entry in Line 16 that mentions K-3 is attached. Turbo tax online is saying the relevant section is not available yet. If I have to file my taxes by April 15th, should I mention in my return there is no K-3 in Line 16. Could you please advise if this is the right approach?

3. If I proceed with submission of my return and once K-3 is available, how will I submit the relevant form. As you have already mentioned that you cannot advise without more information from IRS. I can wait for this.

[AliciaP1]

So, to question 2 above - yes.  Just add a statement that there is no K-3 yet and keep an eye out for the information later this year about the stance the IRS will take regarding attaching.

@santanu

[Jerms]

Thank you. For clarification, where would I add the statement that there is no k-3 yet? I am using TurboTax Deluxe. 

[fulton610]

I just unchecked the box, indicating there is no k-3 attached. If it comes in later you can attach it to your 2022 (next year) return is what I was told. 

[kittycat4]

"add a statement" - how exactly can this be done in TurboTax in a way that would allow filing?

[RobertB4444]

@kittycat4 @Jerms  You can only add a statement to a return in TurboTax if you are filing by mail.  

[Sunny007]

Hi AliciaP1 - Thanks for the response. However if I keep the K-3 indicator attached 'Checked' the federal review gives an error. They only way to file is by unchecking the indicator.

I am not comfortable in unchecking the K-3 flag as it is checked in K-1 form that is being sent to IRS.

As IRS is not making mandatory to submit K-3 this year, TT should allow us to keep the K-3 indicator checked but remove the error and allow filing. This will ensure that when the K-3 is issued in the Aug, we can add that form and refile. 

So can TT look into this issue as many people will face this issue.

[kittycat4]

So Robert, why doesn't Turbo Tax allow to have this box checked given that the form isn't required this year? You are basically denying people a chance to file tax return online unless they uncheck the box which is checked in their form. This is what I did - unchecked the box - as the paper version of my K-1 had a comment that I am not required to file K-3 and that this partnership income is all in the US - but this is plain error in your program.  Your program shouldn't require people to file a form that is not required. Too late for me, I am not going to amend because of this, but it can help others. 

[chiefrm]

I have a form K-3 related to a K-1 submitted from my accountant, but I can't enter it into TurboTax.  It is for a very small amount of foreign tax paid.  As I am due a refund, I don't want to wait for it, and certainly not past April 15.  What should I do?

[MarilynG1]

You could file your return without your K-3 and Amend it later.

The IRS is not requiring  K-2 and K-3 to be filed for 2021.

Click this link for more info on Form K-3.