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StaceyVA
New Member

South Carolina 1065 Tax Withholding, but no K1 withholding

I filed an LLC Federal 1065 and South Carolina 1065 for rental real estate.  I am not a resident of SC.  The SC 1065 withheld 5% non resident withholding tax, but the SC tax withholding was not reported on the K1.  When I did my individual federal 1040 and SC1040, I had nothing to include that nonresident SC taxes were withheld, so I was taxed again on the SC1040 of around 2%.  Double taxed!  I read on the SC Department of Revenue (DOR) site that I should have filed a 1099-MISC to report the SC taxes withheld, but if I report the income on the 1099-MISC, I will have forms reporting income twice, on a K1 and a 1099-MISC for both me and my wife.

 

From the SC DOR website

"By the 15th day of the third month following the end of the partnership's taxable year, you must provide each nonresident partner with a federal 1099-MISC with SC Only written at the top, showing the amount of income and tax withheld. "

 

Is there any easy way that I can just include the nonresident SC taxes withheld on the SC1040 without the K1 including taxes withheld or an additional 1099-MISC reflecting taxes withheld (and income)?  

 

How can I avoid being double taxed?

Thanks

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2 Replies
AnnetteB6
Expert Alumni

South Carolina 1065 Tax Withholding, but no K1 withholding

You can include the SC withholding amount on your Federal return.  Then it will transfer to the SC return to apply it to the income tax.

 

Use these steps:

 

  • Go to Deductions and Credits > Estimates and Other Taxes Paid > Other Income Taxes and click Start or Update.  
  • Then scroll to Other Income Taxes Paid in 2023.
  • Click Start or Update beside Withholding not already entered on a W-2 or 1099.
  • Answer Yes, and then enter the amount under State Withholdings.

 

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StaceyVA
New Member

South Carolina 1065 Tax Withholding, but no K1 withholding

Thank you very much.  That was very easy to follow an execute.  I just need to find out from SC if that is considered a PTE tax paid on behalf of a non-resident or purely a 5% corporate tax paid.

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