Where in my Individual tax return should I enter a Connecticut Schedule k-1 received from a partnership?

[DrSherman]

Hi,

My wife and her mom are CT residents and I did their LLC taxes using TT Business 2023, which generated Federal and CT K-1s for each partner. My wife's K-1 was sent to my accountant to do our taxes, and I'm doing my mother-in-law taxes using TT Home and Business 2023.

Entering data in the Federal taxes section went with no problems, but when I started doing her CT taxes, I went through all guided steps and nowhere I was asked whether a CT K-1 was received, to enter its data somewhere.

Is there a section or step in the Connecticut Tax module to enter the data from the CT K-1? I checked the forms generated in the individual tax and no schedule K-1 was generated for CT (only for Federal).

Thanks!

[ThomasM125]

A schedule K-1 would be entered in the federal section of TurboTax and then flow down to the state tax return. If you had income reported on a K-1 schedule, it may be taxable for federal as well as state tax purposes, that is why you enter it in the federal section of TurboTax.

You would enter the schedule K-1 in the Federal section of TurboTax, then Business Investment and Estate/Trust Income, then Schedule K-1:

I believe you have a normal K-1 schedule reporting the income associated with what is also listed on the Connecticut K-1 schedule. If so, enter that in the federal section of TurboTax, and then use Connecticut K-1 schedule to identify items of income and deduction that may have a separate treatment on your Connecticut return.

Then, when you go through the Connecticut and federal return, use the information on the CT K-1 to make adjustments for things that get a different treatment on your federal versus state return. For instance, you may have state bond interest that is tax-exempt on your federal tax return,  but your CT K-1 may list interest from out of state that is taxable on your Connecticut return. You would use the information on the CT K-1 to make an adjustment for this when you enter the box 18 amount on your K-1 form entry in TurboTax.

[DrSherman]

Thanks for your response, but although I had entered the K-1 information in the Federal taxes section, I still don't see a CT k-1 generated in the Connecticut tax section:

 The K-1 income is a loss, and it's a plain vanilla K-1, with only these fields filled out: Ordinary business income (loss), Self-employment earnings (loss), Alternative minimum tax (AMT) items.

What puzzles me is that TT Business created a CT K-1 for both partners in the LLC (wife and her mother), but TT Home and Business can automatically ingest that information, unless I'm missing something here.

[ThomasM125]

Here are some instructions to Connecticut schedule CT K-1. It points out that you need to enter income, deductions and credits reported on that schedule on your Connecticut tax return and it mention on what line numbers those entries should appear. These entries will come from the federal K-1 form you enter. If there are discrepancies then you will have to visit those areas in your state return and make allocations as is appropriate. 

For instance, you may have business income on your federal return that does not all apply to Connecticut. You would use the information reported on the CT K-1 to determine what amount of income to allocate to Connecticut:

So, there is no way to enter the CT K-1 schedule into your Connecticut state program in TurboTax, you simply use it as a guide to insure that all income, deductions and credits reported on it are properly stated on your Connecticut return.