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).
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.
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.
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.
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?
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.
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.
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
Thank you. For clarification, where would I add the statement that there is no k-3 yet? I am using TurboTax Deluxe.
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.
"add a statement" - how exactly can this be done in TurboTax in a way that would allow filing?
@kittycat4 @Jerms You can only add a statement to a return in TurboTax if you are filing by mail.
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.
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.
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?
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.
Yes - we can always do that. However you are missing the key point.
Turbotax keeps on giving error and does not allow me to file it. So I have to remove the K-3 indicator.
However if I do not select the K-3 indicator then I am not entering the correct data as provided by the company.
So to keep the form integrity - TurboTax need to change the code such that user can select the K-3 indicator (based on K-1 form) but is not getting the error and thus submit the tax returns.
As TT knowns that K-3 is not required, they can and should remove hard error while submitting.
Thanks
@fulton610
I am into the same situation and i have not yet filed the tax return. Did you already file the tax return? and if yes, was the return accepted?
Yes, I filed, it was accepted and IRS paid out my refund already.
@ Sunny007
While I understand the incompleteness/error is not ideal, I recommend you file and amend later, if it even comes to that. The very beginning expert said that IRS is not requiring you submit it for 2021 so just uncheck the box and be done with it. Otherwise, you’re stressing yourself out for nothing.
Thanks.
Did you remove the K-3 indicator? Currently TT is giving me hard error and does not allow to go further.
The question is how easy will it be to amend? Also, I think it makes people uncomfortable about unchecking a box that is clearly checked.
Here is what I am thinking:
1. Remove the K1 from your filing entirely for now, and file without it.
2. Once the K3 is available, come back to TurboTax and file the amendment, which will be something like "I need to add a K1."
This might be the most easiest/streamlined way. If you try to amend an already filed K1 later, you have to get the SW to understand that you have filed a K1, but it was incorrect. Using my method, all you will be doing is saying "Missing a K1" and then doing everything from scratch once the K3 is available. Plus, you are not caught in a situation where you deliberately provided wrong info.
What are you guys thoughts on my approach?
I am no expert at all, so take this with a grain of salt. I think that it depends on whether K-3 is required this year for a particular partnership or not.
If K-3 is not required, then one doesn't really need to worry about it as there'll be no amendment, IMHO.
For example, my limited partnership (MMP) does not do any foreign activity. Hence, K-3 is not required this year and the partnership has no plans to provide it. I don't know why they checked the box, but in the paper copy of the instructions that I received the partnership mentioned that K-3 will not be required.
If the partnership has any foreign activity, it's a different story, I don't know what the best way is, but I believe any form in the return can be amended.
In my case, I have USO and UCO...these are oil price ETFs, dealing with futures and contracts. The document says they will send a K3 later, and a limited number may need it. I think you are right, since I am in the US and US resident for tax purposes, it should not be required for me.
This is what the document they provided says:
"Beginning in tax year 2021, items of international tax relevance are now provided by the Partnership on Schedule K-3. A limited number of
unitholders (primarily foreign unitholders as well as certain corporate and/or partnership unitholders) may need the detailed information disclosed
on Schedule K-3 for their specific reporting requirements. The IRS has recently provided additional Schedule K-3 guidance, and we will continue to
monitor any future changes impacting our partners. Accordingly, the Schedule K-3 is not included in the enclosed tax package and will be
available online at www.taxpackagesupport.com/proshares by August 31, 2022.
Thanks for the response.
My K-1 CEPQ-Preferred shares. It is 9.25% preferred shares with 8.6% yield. So it is good investment.
I received exactly same wording as a response to my question on K-3 to the company. They also told that the K3 form will come sometime in Aug and most people will not need it or will not have impact.
So while I am uncomfortable in unchecking K-3 indicator, I plan to do it rather than not submitting K-1 at all. Not submitting may be considered default but a correction that is unlikely to have material impact on the taxes may be much less severe.
As we see, we have one of the members here already submitted such return and got it accepted.