Does a K-1 Get Filed With My 1040? – Avoid this Mistake + FAQs
- March 29, 2025
- 7 min read
Yes â and no. You donât mail a K-1 with your Form 1040 in most cases, but you must report all the K-1 income and info on your tax return.
Roughly 30 million K-1 forms are issued to U.S. taxpayers each year through partnerships, S corporations, and trusts.
In this guide, weâll demystify how Schedule K-1 works with your Form 1040 and ensure you file correctly â without costly mistakes.
In this article, youâll learn:
Quick answer: Whether to attach a Schedule K-1 when filing your Form 1040 and why
Key concepts: What a pass-through entity is, and how distributive share and basis affect your taxes
Reporting tips: How to correctly enter K-1 income on your 1040 (and common mistakes to avoid)
State breakdown: A state-by-state table on K-1 attachment rules and special requirements across the U.S.
Global angle: International considerations for K-1s (foreign partners, Schedule K-2/K-3, and cross-border tax rules)
đ What Is a Schedule K-1 and How Does It Relate to Your 1040?
A Schedule K-1 is a tax form used to report income, deductions, and credits from certain pass-through entities to the owners.
Itâs a report of your share of the profits, losses, and other tax items from an entity that doesnât pay tax itself. Key points include:
Pass-through entities â These are businesses like partnerships, S corporations, and trusts/estates. They pass through income to owners or beneficiaries rather than paying corporate tax. The business files an informational return (like Form 1065 for partnerships or Form 1120-S for S corps) and issues K-1s to each member.
Distributive share â This refers to your portion of the entityâs income or loss as allocated by ownership or agreement. For example, if you own 50% of a partnership, your distributive share is 50% of each income or deduction item. The K-1 details these amounts for you.
Why K-1 matters â Even if you didnât receive any cash, the IRS treats the amounts on a K-1 as taxable income (or deductible loss) to you. You must report those items on your personal tax return (Form 1040). This ensures income from businesses and trusts is taxed at the individual level.
Different K-1 types â There are three main K-1 forms:
K-1 (Form 1065) for partners in a partnership or members of an LLC treated as a partnership.
K-1 (Form 1120-S) for S corporation shareholders.
K-1 (Form 1041) for beneficiaries of trusts or estates.
Each is slightly different, but all serve the same purpose of reporting your share of pass-through income.
How K-1 info flows to Form 1040: The numbers on Schedule K-1 feed into various parts of your individual tax return. For instance, ordinary business income from a partnership K-1 goes on Schedule E (Supplemental Income) of Form 1040. Interest or dividends reported on a K-1 might go on Schedule B, capital gains on Schedule D, etc.
You donât send the K-1 itself with Form 1040, but you use its data everywhere itâs needed on your tax return. (Later, weâll walk through reporting steps and examples.)
Important: The Internal Revenue Service (IRS) gets a copy of every K-1 directly from the entity that issues it. For example, a partnership files Form 1065 with all partner K-1s attached.
This is why you generally donât attach the K-1 form to your own 1040 â the IRS already has it on file. Instead, you just keep it for your records and ensure all the income matches what you report.
â Do I Need to Attach a K-1 to My Form 1040? (The Direct Answer)
In most cases, you do not attach a K-1 to your Form 1040.** When filing your individual tax return, whether by mail or electronically, you typically donât include the physical K-1 form. The IRS instructs taxpayers to keep K-1s for their records but not to send them in, except in special situations. Letâs clarify the general rule and the few exceptions:
General rule (No attachment needed): For most taxpayers, just report the K-1 income on the appropriate lines of your 1040 and schedules. You donât staple or upload the K-1 itself. The IRS trusts that the copy they received from the partnership/S corp/trust matches what you report. In fact, tax software usually doesnât even provide a way to attach a PDF of a K-1 for e-filing, because itâs not required.
Why not attach? The IRS has millions of K-1s to match â they use the entityâs return to verify your figures. Attaching would create unnecessary paperwork. Instead, ensure accuracy in transcribing the information onto your return. The K-1 contains codes and footnotes; you input those into your 1040 or attach other schedules (like forms for credits) as needed, but not the K-1 itself.
Exceptions â when you should attach the K-1: There are a few scenarios where including a copy is required:
Federal tax withholding: If your K-1 shows any federal income tax withheld on your behalf, attach a copy to your 1040 so the IRS can see proof of withholding. This is uncommon, but it can happen. For example, if a partnership had to do backup withholding (24%) because your taxpayer ID was missing or youâre subject to certain withholding as a foreign partner, the withheld amount would be noted on the K-1 (often in box 13 or 15 with a code). In such cases, attach the K-1 or the withholding form (like Form 592-B or 8805 for certain cases) to claim credit for that tax paid.
State tax withholding: While not needed for the IRS, if your K-1 shows state taxes withheld (common for nonresident partners), youâd attach a copy of that K-1 to your state tax return to claim the credit. (Weâll cover state rules in detail soon.)
Certain IRS form instructions: Always follow any specific instructions on the K-1 or related forms. Occasionally a form might say âattach Schedule K-1â for a particular credit or election. For instance, a trust beneficiary claiming a specific credit might need to attach the K-1 (Form 1041) showing that credit. But these are case-by-case â the K-1 instructions or your tax advisor will highlight it.
E-filing vs. paper filing: If you e-file your return, the software will transmit all necessary data from the K-1 electronically. You donât scan and attach the K-1. If youâre paper-filing, you still generally do not include K-1s, except for the exceptions above. If attaching, include a copy of the K-1 behind your 1040 and any schedules, so the IRS can match the withholding credit or info.
Bottom line: For 99% of people, a K-1 is for your use to prepare your 1040, not something you mail in. Just double-check for any withholding on it. If none, no need to include it with the filed return. The next sections will ensure you report everything correctly, since leaving K-1 income off your 1040 is a big no-no that can trigger IRS notices or worse.
đź How to Report K-1 Income on Your Tax Return (Form 1040)
Filing your taxes with a K-1 in hand involves translating that formâs contents onto your 1040. It can seem daunting â K-1s often have many boxes, codes, and footnotes. But once you understand the flow, itâs manageable. Letâs break it down step by step, with an example, and highlight where each item goes on your return:
1. Gather all K-1s and instructions: If you have multiple K-1s (say you invested in two partnerships and an S corp), wait until you have all of them. Each K-1 comes typically with a set of âPartnerâs Instructionsâ or similar. Keep those; they tell you where each box item goes on your 1040. Pro tip: If K-1s arrive late, you might need to file an extension (Form 4868) to avoid rushing or filing without them.
2. Identify the type of K-1: Look at the top of the K-1:
If itâs from Form 1065 (Partnership) â youâll be reporting items as a partner (likely on Schedule E and other schedules).
From Form 1120-S (S Corp) â youâre a shareholder; similar reporting, though note S corp items like tax-exempt income or loan repayment can affect stock basis but not be directly taxable.
From Form 1041 (Estate/Trust) â youâre a beneficiary; those K-1 items can include interest, dividends, capital gains, etc., which you report just like if you got them directly, but on the appropriate forms.
Ensure the entityâs EIN (Employer ID) is on the K-1; youâll need it for identification on certain forms (Schedule E asks for partnership EIN, for example).
3. Map K-1 boxes to tax return lines: Each box on the K-1 corresponds to a category of income, deduction, or credit. Common ones:
Box 1 (1065 K-1): Ordinary business income (loss) â Goes on Schedule E, Part II (for partnerships). If positive income and you actively participated, it might not be passive; if youâre just an investor, itâs passive. Mark accordingly.
Box 1 (1120S K-1): Ordinary business income (S corp) â Also goes on Schedule E, but note: S corp income is not subject to self-employment tax the way partnership income can be (more on that soon).
Box 2: Rental real estate income â Report on Schedule E as rental income. Passive activity rules likely apply.
Box 3: Other rental income â also Schedule E.
Box 4: Interest income â Goes on Schedule B (Interest and Dividends), just like a 1099-INT.
Box 5: Dividends â Schedule B as well. If any of those are qualified dividends, that will be indicated.
Box 6: Capital gains â These flow to Schedule D and the capital gains worksheet. Usually, the K-1 will have detail if theyâre long-term or short-term (often in attached statements).
Box 7: Royalties â Typically Schedule E (as royalty income).
Box 8: Foreign transactions â This often indicates foreign income or taxes; you might need Form 1116 for foreign tax credits if applicable.
Box 9/10 (1065 K-1): Section 1231 gains or other income â these might go to specific forms like 4797 for Section 1231.
Box 11: Deductions (like charitable contributions, Section 179 expense, etc.) â These will go on the corresponding lines (Schedule A for charity if you itemize, Form 4562 for your share of Section 179, etc.).
Box 12 (1120S K-1) and Box 13 (1065 K-1): Credits â each code (A, B, C, etc.) corresponds to a different tax credit or deduction (e.g., credit for small employer healthcare, R&D credits, foreign tax credit, etc.). Use the K-1 instructions to find the right form (if any) to claim these credits. Many require attaching a specific form (like Form 3800 for general business credits) but not the K-1 itself.
Box 13 (1120S) or Box 14 (1065): Self-employment earnings â Partnership K-1 will indicate if any income is self-employment (for general partners or managing LLC members). That amount goes to Schedule SE for calculating self-employment tax. S corp K-1 does not have this because S corp income is not self-employment earnings (shareholders take salaries separately via W-2).
Box 14 (1120S) or Box 15 (1065): Other information â This could include things like AMT (alternative minimum tax) preference items, tax-exempt interest, or at-risk info. Tax-exempt income is reported for information (affects your basis but not taxable). AMT items may require Form 6251 adjustments.
Section 199A information: Since 2018, K-1s provide data for the Qualified Business Income (QBI) deduction (Section 199A). If your K-1 is from a pass-through trade or business, it will have a Section 199A statement with your share of QBI, W-2 wages, UBIA of qualified property, etc. Youâll use that to calculate the 20% deduction on Form 8995 or 8995-A, if eligible. This is a big tax benefit of pass-through income, so donât overlook it!
Basis and at-risk limitations: Your K-1 may have info on your capital account or loan basis, but you are responsible for tracking your basis in the investment. If the K-1 shows a loss, you can only deduct it if you have enough basis and if passive loss rules allow. You might need Form 6198 (At-Risk Limitations) or a basis worksheet. Itâs technical, but essentially: you canât deduct losses beyond what youâve invested (including reinvested earnings) in the partnership/S corp. Any disallowed loss is suspended to future years.
Attached statements: K-1s often come with extra statements (indicated by an asterisk * next to a code). Always review them, as they give detail, e.g., a breakdown of âOther deductionsâ or list of portfolio income items. They can tell you exactly where to put an amount on your return.
Example: John is a 25% partner in Acme LLC (treated as a partnership). In March, he receives a K-1 from Acmeâs Form 1065. It shows:
Box 1: $40,000 ordinary business income.
Box 4: $200 interest income.
Box 7: $1,000 royalty income.
Box 13, code W: $1,500 (which the footnotes say is Section 199A QBI).
Box 14, code C: $10,000 (Section 1231 gain from sale of equipment).
An attached statement says the $40,000 in Box 1 is nonpassive (John materially participates in the business), and that $1,500 of interest was from U.S. bonds (taxable) and $200 of the royalty is oil & gas (depletion info provided).
How John reports this: He will:
Enter $40,000 on Schedule E, Part II (page 2), marking it nonpassive income from Acme LLC (EIN listed).
Include $200 interest on Schedule B (Part I).
Include $1,000 royalty on Schedule E, Part I (royalty income section).
For the $10,000 Section 1231 gain, report it on Form 4797 (Sales of Business Property) line 2, which will flow to Schedule D.
Use the Section 199A info to fill out Form 8995 (or 8995-A) to claim any qualified business income deduction on that $40k (subject to limitations).
Ensure he has enough basis to cover $0? Thereâs no loss here, so basis isnât limiting his deductions, but he will increase his basis by the $40k income for next yearâs calculations.
He does not attach the K-1 to his Form 1040, because there was no withholding. He simply keeps it filed away.
Double-check totals: After inputting K-1 info, John should check that his total income on Form 1040 includes all those pieces. Many tax software programs have a K-1 entry module that then automatically puts the numbers in the right places. If filing by hand, carefully follow the instructions line by line.
Common scenario â multiple K-1s: If you have several K-1s, group the similar items. For example, multiple partnership K-1s all with ordinary income: you can total them on one Schedule E line or separate lines â just be consistent and list each partnership name if separate. For interest/dividends from K-1s, you can aggregate them with your other interest/dividends (just make sure to attach an explanation if the IRS would wonder why your Schedule B total doesnât match just your 1099-INTs â listing âK-1 Interest â $Xâ is wise in such cases).
Tip: If any K-1 itemâs treatment confuses you, consult a tax advisor or CPA. K-1 taxation gets intricate (passive vs active, at-risk, etc.). Itâs better to get help than to misreport. CPAs and enrolled agents handle K-1s regularly; they can ensure things like depreciation recapture, foreign taxes, or qualified business income are handled correctly, keeping you in the IRSâs good graces. âď¸
đŤ Common Mistakes to Avoid with K-1s (and How to Avoid Them)
Dealing with K-1 forms can be tricky. Unfortunately, mistakes can lead to IRS notices, penalties, or missed tax savings. Here are some frequent errors people make with K-1s, and how you can avoid each pitfall:
Mistake 1: Filing your 1040 without all K-1s. Many partnerships and S corps have later deadlines or extensions, meaning K-1s often arrive in March, April, or even September (if the entity filed an extension). If you file your personal taxes without waiting for a K-1, you might omit income. The IRS will catch this because they have the K-1 on file. This can trigger a CP2000 notice for underreported income.
How to avoid: If you know a K-1 is coming (youâre a partner/shareholder/beneficiary but havenât received it by early April), file for an extension of your 1040. Itâs automatic 6 months (until October 15) and allows time to receive and include all K-1s. If you truly didnât know about a surprise K-1, you may have to file an amended return (1040-X) later, but thatâs extra work. Better to be proactive if possible.Mistake 2: Attaching the K-1 when not required. Weâve emphasized you usually shouldnât attach K-1s. Some taxpayers still attach every K-1 out of caution or confusion (especially when paper filing). While not the worst mistake, it can slow processing. For e-filing, trying to attach unnecessary PDFs might even cause a rejection.
How to avoid: Remember: only attach if thereâs a specific need (like tax withheld or state requirement). Otherwise, keep the K-1 in your records file. If paper filing and you have a borderline case, including it wonât get you penalized, but generally itâs better to follow IRS guidelines and omit it.Mistake 3: Inputting the wrong figures. K-1s can be confusing with their codes and multi-page info. Itâs easy to accidentally put a number on the wrong line (e.g., treating a capital gain as ordinary income) or missing a code that requires a form.
How to avoid: Take it slow and use the K-1 instructions. Match each box with the proper place on your return. If using software, carefully select the right categories for each code. Double-check that the totals make sense (e.g., if your partnership K-1 income was $10k but only $2k ended up on your 1040, you likely mis-entered something).Mistake 4: Ignoring basis and loss limitations. Suppose your K-1 shows a $50,000 loss. You might be tempted to deduct it all. But if you only invested $10,000 in the partnership, you probably canât take the full loss (the rest is suspended). Similarly, passive loss rules might disallow it if you have no passive income. Many taxpayers miss this and deduct too much, which the IRS may flag.
How to avoid: Be aware of your basis: the sum of your contributions, share of income, and other investments in the entity minus distributions and losses in prior years. If in doubt, work with a CPA to calculate allowed losses. Use Form 6198 (At-Risk Limitations) if required, and Form 8582 (Passive Activity Loss Limitations) for passive losses. This area is complex â professional guidance is often worth it.Mistake 5: Forgetting state tax implications. Your federal K-1 items often carry to your state tax return too (if your state has income tax). Some people report the K-1 on federal but neglect it on the state, or vice versa, especially if the income is from an out-of-state partnership. States share info with the IRS; discrepancies can cause state-level audits or notices.
How to avoid: Always include K-1 income on all relevant state returns. If the K-1 is from an entity operating in multiple states, you might have state-specific K-1s or allocation schedules showing what income is taxable in each state. Use those to file nonresident returns if needed. We provide a state-by-state breakdown in the next section.Mistake 6: Overlooking tax elections or carryovers on the K-1. K-1 forms can contain important elections (like a Section 754 step-up in partnerships) or carryforward info (like unallowed losses, excess credits, AMT adjustments). If you ignore these, you might miss out on future tax benefits or mishandle asset basis when you sell your partnership interest, etc.
How to avoid: Read any footnotes or attached statements about elections and carryovers. Maintain a file year-to-year. For instance, if thereâs a suspended loss, keep track so you know to free it up when you have income or when you dispose of the activity (disposition allows you to take remaining losses).Mistake 7: Not seeking advice for complex situations. If your K-1 involves things like international activities (Schedule K-3), oil & gas (depletion), REIT dividends, or youâre dealing with an IRS audit of the partnership (new audit rules), donât go it alone.
How to avoid: Hire a tax professional when facing complicated K-1 issues. For instance, international K-1 items might mean you need to file Form 1116 (foreign tax credit) or even FBAR/FATCA forms if you have foreign partnership interests. A CPA or tax attorney can guide you through safely.
In short, be meticulous with your K-1. Many issues stem from rushing or not understanding what the K-1 is telling you. By being careful and informed (as you are by reading this article! đ), you can avoid errors that cost time and money.
đ˘ Partnership vs. S Corp vs. Trust K-1: Differences Explained
Not all K-1 forms are identical. Depending on whether your income comes from a partnership, S corporation, or trust/estate, there are some differences in taxation and reporting. Hereâs a breakdown of each type and how they compare:
Partnership K-1 (Form 1065):
Entity & Tax: Partnerships (including multi-member LLCs) donât pay federal income tax themselves. Instead, they file an informational return (Form 1065) and issue K-1s to partners.
Income Types: Can include business income, guaranteed payments to partners (similar to a salary for active partners, reported on K-1 and taxable as ordinary income), rental income, interest, dividends, capital gains, etc.
Self-Employment Tax: If youâre a general partner or an LLC managing member, your share of business income is generally subject to self-employment tax (15.3% Social Security/Medicare) in addition to income tax. This is reflected on the K-1 (Box 14 code A for SE income) and goes on your Schedule SE. Limited partners or passive LLC members typically donât pay SE tax on K-1 income (except on guaranteed payments).
Basis Tracking: Partners must track outside basis â your basis starts with money or property you contribute, increases with income and additional contributions, and decreases with losses and distributions. Partnerships also track a capital account on the K-1, but that might be on different accounting (tax or GAAP) â donât confuse it with basis (though itâs related).
At-Risk & Passive Rules: Applicable â many partnership investments are subject to passive loss limits (rental activities, etc.) and at-risk rules.
Special Allocations: Partnerships can allocate items in special ways (not strictly by ownership percentage) if the partnership agreement says so and IRS rules allow. Your K-1 might show different percentages for different items. Always use the actual numbers on the K-1.
S Corporation K-1 (Form 1120-S):
Entity & Tax: S corps are corporations that elect to be taxed as pass-throughs. Like partnerships, they generally pay no federal income tax (with a few exceptions, like certain built-in gains tax). Income flows to shareholders via K-1.
Income Types: Similar range (business income, interest, etc.), though no guaranteed payments â instead, shareholders who work for the S corp must take a reasonable salary reported on W-2. Remaining profit is distributed via K-1.
Self-Employment Tax: Big difference â S corp K-1 income is not subject to self-employment tax. This is often a tax planning advantage of S corps. You pay FICA on the salary you draw, but the K-1 profit part is just subject to income tax, not 15.3% self-employment tax. However, the IRS monitors S corps for reasonable compensation â you canât declare all earnings on K-1 to avoid SE tax; you must pay yourself a fair wage first.
Basis Tracking: Shareholders track stock basis and possibly debt basis (if you personally loaned money to the S corp). You need basis to take losses or distributions without tax. The K-1 will show your share of income and usually a statement of loans, etc. Note: S corp basis rules differ â debt of the company does not increase your basis unless itâs a loan from you (unlike partnerships, where your share of debt can increase basis).
At-Risk & Passive: At-risk rules apply, and if you donât materially participate, the income could be passive (though with S corps, usually shareholders are active in small businesses).
State Differences: Some states charge S corps a small tax or fee even though federal doesnât. Also, S corps can have up to 100 shareholders, all U.S. persons (no foreign or corporate shareholders allowed in general).
Trust/Estate K-1 (Form 1041 for beneficiaries):
Entity & Tax: Trusts and estates can be taxable entities. They file Form 1041 if they have income. However, if they distribute income to beneficiaries, that income is deducted by the trust and taxed to the beneficiaries. K-1s go to beneficiaries showing their share of distributable net income.
Income Types: Often investment income â interest, dividends, capital gains â or rental income, etc. The K-1 will categorize it. Capital gains are sometimes kept in the trust (then taxed at the trust level) unless the trustee distributes them or treats them as distributable.
No self-employment issues: Typically, you wonât see SE income here. Itâs usually passive types of income. No qualified business income deduction usually (unless the trust was running a business).
Unique credits: Trust K-1s might carry credits like foreign tax credit (if the trust paid foreign tax on income) or backup withholding if, say, the trust sold stock and had withholding. Beneficiaries can claim those on their 1040.
Estate vs Trust differences: If itâs an estate K-1 (from a deceased personâs estate during probate), similar treatment. One nuance: an estate or trust can retain income and pay its own tax (often at higher rates), or distribute more to push tax to beneficiaries (often beneficial if beneficiaries are in lower brackets). The K-1 indicates what was distributed/taxable to you.
Basis: Not as directly relevant as with partnerships/S corps, because as a beneficiary youâre not an âownerâ per se. But if you inherited property, basis matters for other reasons (step-up rules).
To summarize these differences, hereâs a handy comparison table:
| Feature | Partnership (1065 K-1) | S Corporation (1120-S K-1) | Trust/Estate (1041 K-1) |
|---|---|---|---|
| Pass-through income taxed on⌠| Partnersâ 1040 (individual level) | Shareholdersâ 1040 | Beneficiariesâ 1040 (if distributed) |
| Type of Owners | Partners (incl. LLC members) â can be individuals, corps, etc. | Shareholders (<=100, mostly individuals) | Beneficiaries (heirs, trust beneficiaries) |
| Ownerâs Role | Partners can be active or passive; can receive guaranteed pay | Shareholders often also employees (get W-2 for salary) | Beneficiaries typically receive distributions |
| Self-Employment Tax | Yes, on ordinary income for general partners/active LLC members | No, K-1 income not SE taxed (shareholder pays FICA only on W-2 wages) | N/A (trust income not earned by beneficiary directly) |
| Basis includes entity debt? | Yes, partnerâs share of partnership liabilities increases basis | No, shareholderâs basis only increases by direct loans they make to S corp | N/A (no ownership basis; but inherited asset basis step-up applies) |
| Common Income Items | Business op income, rentals, interest, dividends, cap gains, guaranteed payments | Business op income, interest, dividends, cap gains (no guaranteed pmts) | Interest, dividends, rentals, cap gains, other income distributed |
| Loss Limitations | Basis, at-risk, passive rules all apply to losses/deductions | Basis (stock and debt), at-risk, passive rules apply similarly | Distributions canât create a âlossâ for beneficiary (trust just retains losses) |
| Tax Payments | Partnership itself usually pays no tax (except maybe state fees); issues K-1s for all income | S corp usually pays no federal tax (some state franchise taxes); issues K-1s | Trust/Estate may pay tax on undistributed income; issues K-1 for distributed income |
| Special Forms | Files Form 1065; can make elections like Section 754 (basis step-up on transfers) affecting K-1 info | Files Form 1120-S; must keep status (limits on owners, one class of stock) or reverts to C corp | Files Form 1041; follows trust law for what is income vs principal for distributions |
Understanding these distinctions can help you anticipate what your K-1 will contain and how it affects your tax outcome. For example, if youâre deciding between forming a partnership LLC or an S corp for your business, taxes might influence your choice: partnerships offer flexibility and basis from debt, S corps offer self-employment tax savings. Each has pros and cons beyond this articleâs scope, but the K-1 differences are a key piece of the puzzle.
đ State-by-State Guide: Attaching K-1s and State Tax Rules
When it comes to state taxes, each state has its own rules about reporting income from K-1s and whether you need to attach the K-1 to your state return. Generally, the same principle applies: you report the income on your state return but usually donât need to mail in the K-1, unless youâre claiming a state-specific credit or withholding that needs verification. Below is a state-by-state breakdown. For brevity, weâll note whether the state requires any K-1 attachments and other notable points:
(Note: If a state isnât listed, assume standard treatment â report K-1 income, no attachment of the K-1 itself unless claiming credits or if paper-filing and state suggests including it. Always check your stateâs instructions for updates!)
| State | State K-1 Form or Equivalent? | Attach K-1 to State Return? | Details / Notable Rules |
|---|---|---|---|
| Alabama (AL) | AL Schedule K-1 (from Form 65 partnership return) | Sometimes | Nonresident withholding: Alabama partnerships must withhold tax on nonresidents; the K-1 shows credit. Attach K-1 (or withholding statement) to claim that credit on AL40. |
| Alaska (AK) | No state income tax | N/A | Alaska has no personal income tax, so K-1s arenât filed at the state level for individuals. |
| Arizona (AZ) | AZ K-1 (Form 165 for partnerships) | If claiming credits | Usually no attach needed unless claiming a credit (like solar credits) passed through on a K-1. AZ has a partnership K-1 that details your share of state adjustments. Include info on AZ return as required. |
| Arkansas (AR) | AR K-1 (AR1050 for partnerships) | If paper-filing | If you e-file AR, you input K-1 info. For paper returns, AR often wants a copy of federal K-1 attached to verify income. If claiming state tax withheld by a pass-through, attach K-1. |
| California (CA) | CA Schedule K-1 (565 for partnerships, 100S for S corps, 541 for trusts) | Yes, for certain credits/withholding | California K-1s mirror federal but with state adjustments. If youâre a nonresident and the partnership withheld CA tax on your behalf (shown on Schedule K-1 (565) or a Form 592-B), attach that to your CA 540 to claim the credit. Residents typically donât attach K-1s. CA also has a Passthrough Entity Tax Credit (SALT cap workaround) â if you claim it, attach the CA K-1 or FTB statement showing the credit. |
| Colorado (CO) | No separate K-1 (use federal) | No (unless tax withheld) | Colorado relies on federal K-1 info. Just report the income on CO Form 104. If any CO withholding (e.g., oil/gas withholding) is shown on a K-1, attach it to claim the credit. |
| Connecticut (CT) | CT K-1 (CT-1065/1120SI Schedule CT K-1) | Yes, if claiming credit | CT has an entity-level tax for pass-throughs (PE Tax). Your CT K-1 will show a credit for your share of PE Tax paid. To claim that credit on CT return, attach the CT K-1. Otherwise, report income normally; no need to attach if no credit. |
| Delaware (DE) | No separate K-1 (use federal) | No | DE individual return instructions donât require K-1 attachments. If you have DE-source partnership income as a nonresident, file a DE nonresident return, report the income. Usually no withholding credit to claim (DE doesnât require partnership withholding). |
| Florida (FL) | No personal income tax | N/A | Florida residents donât file state income tax, so no K-1 issues at state level. (But note: FL has no personal tax, though it has a corporate tax â but S corps/partnerships typically not subject to it.) |
| Georgia (GA) | GA K-1 (600 series for entities) | If paper-filing or claiming credit | GA generally follows federal. If partnership/S corp withheld GA tax for nonresidents (rare in GA), attach K-1 to claim credit. Paper filers often attach K-1s for completeness. Electronic, just keep in records. |
| Hawaii (HI) | HI K-1 (N-20 for partnerships, N-35 for S corp) | Yes, for certain credits | Hawaii K-1 forms are issued. If you claim Hawaii-specific credits (like the Low-Income Housing Credit, etc.) passed through on K-1, you must attach the K-1 to claim them. Otherwise, include income on HI return without attaching. |
| Idaho (ID) | ID K-1 (for partnerships and S corps) | Yes, if tax paid credit | Idaho allows a credit if the partnership/S-corp paid the Idaho income tax on your behalf (composite tax). The K-1 will show that. Attach it to claim the credit on Form 40. Normal income reporting doesnât require attachment. |
| Illinois (IL) | IL Schedule K-1-P (partnerships/S corps) | Yes | Illinois requires that individuals attach a copy of any IL K-1-P they received to the IL-1040. This is to report and claim passthrough withholding or credits. Illinois partnerships/S corps pay a replacement tax and may pass credits; the K-1-P documents those. Keep it attached if filing by mail; for e-file, youâll input the details and usually still submit the PDF in the state e-file if possible. |
| Indiana (IN) | IN K-1 (IT-65 for partnerships, etc.) | If claiming credit | IN K-1s provide info on distributive share and any withholding (Indiana has an nonresident withholding option). If your K-1 shows IN tax withheld (composite tax), attach to claim credit. Otherwise, report income on IN return and no attachment. |
| Iowa (IA) | IA Schedule K-1 (41-155) | If paper or claiming credit | Iowa issues K-1s for partnerships. If thereâs withholding (e.g., from Iowa gambling winnings via partnership or other Iowa tax credits), attach the K-1. Many filers attach by habit on paper. Not required for everyone. |
| Kansas (KS) | KS K-1 (K-120S for S corp, K-65 for partnership) | If credit/withheld | Kansas pass-throughs might have withholding for nonresidents (at 5%). If so, K-1 will show it; attach to KS-40 to claim. Otherwise, include K-1 income in state taxable income, no attachment. |
| Kentucky (KY) | KY K-1 (740NP for nonres, etc.) | If tax withheld | KY requires withholding on distributions to nonresident owners (at 5% in many cases). That credit is claimed on individual return by attaching K-1. KY instructions often say âattach K-1, if applicable.â Residents with K-1 income just report it without attachment. |
| Louisiana (LA) | LA K-1 (IT-565) | If credit/withheld | Louisiana has a composite tax option; if the entity paid on your behalf or withheld, attach K-1 for credit. LA also has some state-only credits passed via K-1 (like motion picture credits); attach K-1 to claim. |
| Maine (ME) | No separate (use federal K-1) | No (unless credit) | Maine mostly follows federal K-1. If any Maine-specific credit is on a K-1 (such as state tax credit), attach it. Generally, no need to for normal income reporting. |
| Maryland (MD) | MD K-1 (510 schedule) | Yes, for nonresidents | MD pass-through entities must withhold state tax for nonresident owners (8% for individuals). If youâre a nonresident, attach the MD K-1 (or Form 510 schedule) to claim that credit on your MD 505. MD residents usually donât get withholding on K-1, so just report income on MD return without attachment. |
| Massachusetts (MA) | MA Schedule 3K-1 (partnerships) | If filing paper | MA provides a K-1 equivalent. E-filing, you input the info. If paper filing, you should attach Schedule 3K-1 (or 2K-1 for S corps) to the MA return. MA also has unique sourcing rules for partnerships; use the state K-1 info accordingly. |
| Michigan (MI) | No separate (use federal) | No | Michigan doesnât require attaching K-1s. Just report any partnership/S corp income on MI-1040. If any MI flow-through withholding existed (rare), attach that schedule. |
| Minnesota (MN) | MN K-1 (M3A for partnership) | If claiming credit | Minnesota has a partnership K-1 form (for composite tax and nonresident withholding details). If your MN K-1 shows tax paid on your behalf, attach it for credit on MN return. Otherwise, include income normally. |
| Mississippi (MS) | No separate (use federal) | No (generally) | MS generally follows federal. If an MS partnership withheld tax for a nonresident owner, attach proof (K-1 or statement) to claim credit. Not common. |
| Missouri (MO) | MO K-1 (MO-1065 K-1) | If claiming credit | Missouri requires nonresident partners/shareholders to either file or have tax withheld. If withheld, attach K-1 to claim credit. MO K-1 also shows modifications; include those in MO-1040 and typically attach K-1 if paper filing to support adjustments. |
| Montana (MT) | MT Schedule K-1 (PR-1 for partnerships) | Yes, nonresident withholding | Montana requires pass-throughs to withhold on nonresidents (unless they file an exemption). Your MT K-1 will show any withholding. Attach it to claim the credit on MT return. Residents with K-1 income include it normally (no attach needed unless claiming a credit). |
| Nebraska (NE) | NE Schedule K-1N | Yes, if any Nebraska source | Nebraskaâs K-1N for partnerships/S corps shows NE-source income and any withholding. If youâre a nonresident with NE income, file a NE return and attach the K-1N to show the source income (especially if claiming a reduced amount due to a state allocation). If tax was withheld (NE requires 6% nonresident withholding), attach to claim credit. |
| Nevada (NV) | No income tax | N/A | No state income tax, so no personal tax filing needed for K-1 income in Nevada. |
| New Hampshire (NH) | No wage/interest tax, but has interest/dividend tax | Maybe | NH has no broad income tax, but it taxes interest and dividends over a threshold (though this tax is phasing out by 2027). A partnership K-1 with interest/dividend might trigger NH 1040 (not to confuse with federal form) filing. In practice, NH doesnât have a K-1 attach requirement for that; youâd report interest/dividends if they exceed limits. For business profits tax (for certain large partnerships), thatâs an entity-level issue. |
| New Jersey (NJ) | NJ Schedule NJK-1 | If claiming credit | NJ issues its own K-1 form. NJ pass-through entities can pay a Pass-Through Business Alternative Income Tax (BAIT) as SALT workaround; your NJK-1 will show a credit. Attach NJK-1 to claim that credit on your NJ return. Also, NJ withholds on nonresident owners (known as CBT withholding) â again, attach K-1 to claim. Residents just report income on NJ-1040 (no need to attach K-1 if no credits). |
| New Mexico (NM) | NM Schedule K-1 (PTE) | If claiming credit | NM has a pass-through entity tax election. If your share was paid, claim the credit with K-1 attached. NM also requires withholding on nonresidents; attach K-1 for that credit. |
| New York (NY) | NY IT-204-IP (for partnerships) | If tax paid on your behalf | NY partnerships file IT-204 and provide IT-204-IP to partners (similar to K-1). If the partnership paid the optional Pass-Through Entity Tax (PTET) for you, youâll claim a credit on NY return â attach the certification or K-1 equivalent. Also, if youâre a nonresident and had NY source income, ensure you file NY Nonresident return (IT-203) â typically no need to attach K-1 if e-filing, but include if paper-filing to show source allocation. |
| North Carolina (NC) | NC K-1 (D-403 for partnerships) | If claiming credit | NC requires withholding on nonresident partners (4%). If your NC K-1 shows that, attach it to claim credit on D-400 return. NC also has an elective PTE tax for SALT cap workaround; attach K-1 showing credit if you claim it. |
| North Dakota (ND) | ND Schedule K-1 | If claiming credit | ND allows composite filing or withholding. If K-1 shows ND withholding, attach for credit. ND also has a unique adjustment for ag commodity processing facility credits, etc., which would be on K-1. Attach if needed to claim. |
| Ohio (OH) | No separate (use federal info) | No (generally) | Ohio taxes business income at potentially different rates (Business Income Deduction rules). Partnerships/S corps in OH might file composite returns. Generally, you report K-1 income on OH return, no need to attach. If any Ohio pass-through entity tax paid on your behalf (rare, OH has municipal taxes too which is separate), attach proof to claim credit. |
| Oklahoma (OK) | OK K-1 (512-S for S corp, 514 for partnership) | If credit/withholding | OK requires withholding 5% on distributions to nonresident owners. K-1 will show that; attach to claim credit. Also, OK has credits (like coal credits) that can pass through â attach K-1 if claiming. |
| Oregon (OR) | OR K-1 (OR-65 for partnership) | If claiming credit | Oregon allows a reduced tax rate for certain pass-through income (via Form OR-PTE). But generally, just report K-1 info on OR return. If partnership paid OR state tax on your behalf or withholding, attach K-1 to claim credit. |
| Pennsylvania (PA) | PA RK-1/NRK-1 (for residents/nonresidents) | If paper-filing | PA is unique: it has its own K-1 forms for PA income (since PA rules differ, e.g., no passive loss concept, income classes). If youâre filing PA by paper, include the PA K-1 (RK-1 or NRK-1) with your return. E-filing, you input the info. PA partnerships must send these to partners. PA also withholds on nonresidents only for non-partner distributions, so usually not on K-1. |
| Rhode Island (RI) | RI K-1 (RI-1065) | If claiming credit | RI pass-throughs must withhold 3% on nonresident partners if income is $1k+. The RI K-1 shows that; attach to claim credit on RI return. RI also has an elective pass-through tax (PTET) with a credit on K-1. Attach if claiming it. |
| South Carolina (SC) | SC K-1 (I-335 for partnerships) | Yes, for paper returns | SC instructs: if filing a paper return, attach K-1s to your SC1040. For e-filing, include the info but you obviously canât âattachâ physically. SC withholds 5% on nonresident partner income; credit is claimed on SC1040 (attach K-1 or SC withholding form to paper return). |
| South Dakota (SD) | No income tax | N/A | No personal income tax in SD, no K-1 filing required at state level. |
| Tennessee (TN) | No general income tax (had int/div tax) | No | TN phased out its Hall Tax on interest/dividends by 2021, so now no personal income tax. K-1s not taxed at state level for individuals. (TN does have an entity-level franchise/excise tax on partnerships/S corps, but that doesnât involve individual filing.) |
| Texas (TX) | No income tax | N/A | No personal income tax, so no state filing of K-1 info for TX. (TX has franchise tax on entities, but again, not on personal return.) |
| Utah (UT) | Utah K-1 (TC-65) | If claiming credit | UT requires withholding on nonresident partners (5% of their share). K-1 shows it; attach to claim credit on UT return. UT also has a pass-through entity tax election for SALT cap workaround; if you claim that credit, attach K-1 or statement. |
| Vermont (VT) | VT K-1 (BI-471 Schedule K-1) | If claiming credit | Vermont requires withholding on nonresident owners (6-8% depending). The VT K-1 will show any tax paid. Attach it to claim the credit on VT return. Residents just include K-1 income normally. |
| Virginia (VA) | VA K-1 (for 502 pass-through entity return) | No (with exceptions) | VA doesnât want federal K-1s attached (their instructions explicitly say donât include them). However, if claiming a credit passed through (like VA coal credit, etc.), you might include the K-1 or a schedule. VA also requires withholding on nonresident owners (5%); they issue a form VK-1 detailing it â attach that to claim the credit. |
| Washington (WA) | No income tax | N/A | No personal state income tax in WA. (Note: WA has a new capital gains tax effective 2022 for certain high gains, but thatâs separate and not a general pass-through income tax. K-1 ordinary income isnât subject to WA tax.) |
| West Virginia (WV) | WV K-1 (SPF-100 K-1) | If claiming credit | WV requires withholding on nonresident owners (6.5%). K-1 shows it. Attach to WV return for credit. Residents just report income. WV K-1 also provides state modifications, if any. |
| Wisconsin (WI) | WI Schedule 3K-1/5K-1 | Yes, if claiming credit | WI issues a state K-1. WI has an entity-level tax election (SALT workaround) â if used, your WI K-1 will show a credit equal to tax paid for you. Attach that to claim credit on WI Form 1. Also, nonresident withholding and composite returns exist; attach K-1 if claiming withholding credit. |
| Wyoming (WY) | No income tax | N/A | No personal income tax in WY, so nothing to file at state level from a K-1. |
| Washington D.C. (DC) | DC K-1 (D-65 for partnership) | If claiming credit | D.C. unincorporated business tax (UBT) may apply at entity level, but individual partners still file DC return for any DC-source income. If DC franchise tax was paid and a credit given to partners, attach K-1. DC also withholds 9.975% on unincorporated business distributions to nonresidents; attach D-30 or D-65 K-1 showing that to claim credit. |
Key takeaways from the table: Most states donât require you to attach K-1s unless you are claiming a credit for taxes already paid on your behalf (withholding or elective pass-through entity taxes). Always include the income on the state return regardless. States without income tax, of course, require no action. If youâre in a state with unique pass-through entity taxes (like CT, NJ, NY, WI, etc.), ensure you get the credit if the entity paid those taxes (it can save you a lot on SALT deduction limits federally).
Also note: If you live in one state and have K-1 income from another, you might need to file multiple state returns (one for your resident state, and a nonresident return for each state where you earned K-1 income). Usually, your home state gives a credit for taxes paid to other states to avoid double taxation (not to be confused with pass-through withholding; this is your own income tax). K-1s can help identify the amount of income from each state.
Pro Tip: Keep copies of your K-1s with your state returns in case the state ever questions your reported income. Many state e-filings prompt you to enter info from the K-1, but if something like a depreciation addition or subtraction is required (because state law differs), the K-1 usually provides it.
đ International Considerations for Schedule K-1
In our global economy, itâs possible your K-1 may involve cross-border elements. U.S. taxpayers with foreign partnerships or foreign taxpayers with U.S. partnerships face extra layers of tax compliance. Hereâs what to know about international aspects of K-1s:
Foreign source income on a K-1: If your partnership or S corp has income from outside the U.S. (for example, it operates abroad or received dividends from a foreign company), your K-1 will segregate that. Beginning tax year 2021, the IRS introduced Schedule K-2 and K-3 for partnerships and S corps to report international details. If applicable, you (as a partner/shareholder) might receive a Schedule K-3 in addition to the K-1, showing things like foreign taxes paid, income by country and category, etc. Use this info to file Form 1116 (Foreign Tax Credit) or report income as needed. If you paid foreign taxes through the partnership, you can often claim a credit on your 1040 (so youâre not double-taxed by both countries).
Foreign partnerships (U.S. owner): If youâre a U.S. person who is a partner in a foreign partnership, that partnership might not issue a formal âK-1â if it doesnât file a U.S. return. But you still have to report your share of income. Sometimes U.S. owners of foreign partnerships must file Form 8865 (return of U.S. persons in foreign partnerships) which is essentially giving the IRS what a 1065 would, including a K-1-like statement. Failing to report foreign partnership interests can carry heavy penalties. Consult a tax professional knowledgeable in international tax if you have this situation.
Foreign partners (in U.S. partnerships): If you are a nonresident alien partner in a U.S. partnership, youâll receive a K-1, but taxes work differently. The partnership is required to withhold tax on the foreign partnerâs share of U.S. income (Section 1446 withholding). Typically, the partnership will issue you forms 1042-S or Form 8805 to document the tax withheld. If you need to file a U.S. tax return (Form 1040-NR), you would attach those forms (not necessarily the K-1 itself) to claim credit for the taxes already withheld. Also, as a foreign partner, your K-1 might show effectively connected income (ECI) vs. non-ECI. Only ECI is taxable to nonresident partners by the U.S. (unless itâs FDAP income like interest/dividends which are handled via withholding separately). The partnership should guide on this, and you might need a professional to navigate treaty benefits or other nuances.
Currency and exchange: K-1 amounts are always stated in U.S. dollars. If the partnershipâs books are in foreign currency, they will convert to USD for tax reporting. You should not need to do currency conversions yourself for the K-1 (the entity will have done it). But if you paid some foreign tax in local currency, the credit on Form 1116 will use the USD-equivalent.
Tax treaties: U.S. tax treaties typically do not protect U.S. citizens or residents from U.S. tax on worldwide income (youâre taxed anyway). But if youâre a foreign investor in a partnership, a treaty might exempt certain income types (like maybe no U.S. tax on capital gains for a foreign partner from certain countries). If so, the partnership might not withhold on those, and it would be reflected in the K-1 notes. Always clarify treaty positions; often a statement will be attached.
Expat considerations: If youâre a U.S. expat abroad receiving a K-1 from a U.S. partnership, you still file U.S. taxes as usual (possibly with foreign earned income exclusions or credits for your other income). The K-1 income isnât âearnedâ by you directly, so the Foreign Earned Income Exclusion (FEIE) usually doesnât apply to K-1 passive income, but the foreign tax credit might if the partnership paid foreign taxes.
Inbound vs outbound: Outbound refers to U.S. persons with foreign investments (see Form 8865 above). Inbound refers to foreign persons with U.S. investments (see 1040-NR and withholding). Either way, K-1s are a part of the picture, and additional IRS forms come into play:
Form 8804/8805: Annual return for partnership withholding on foreign partners (and statements to those partners). If youâre a foreign partner, expect these if the partnership had effectively connected income.
Form 1042: Annual return for U.S. withholding on certain income to foreign persons (and 1042-S statements to recipients).
FBAR/8938: If you own part of a foreign partnership, the interest might need disclosure on FBAR (FinCEN 114) or FATCA Form 8938 if above thresholds.
BE-10/BE-11: Not tax, but note: owning foreign businesses can trigger Commerce Dept. surveys too.
International Example: Maria is a U.S. taxpayer who invested in a UK-based partnership that does not file with the IRS. Maria owns 30%. The partnership earns $100k, all foreign-source, pays $10k UK corporate tax on it, then passes $90k to partners (Mariaâs share $27k). What does Maria do?
Since the partnership didnât file a 1065, Maria must file Form 8865 (if ownership > 10% or certain thresholds) to report the partnershipâs financials as if it were a U.S. partnership. Essentially, she provides the IRS with a âsubstitute K-1â for herself and info on the whole partnership.
She reports $27k on her 1040 (likely passive income). The UK tax paid doesnât directly show on a K-1, but Maria can claim a foreign tax credit for her share of foreign tax paid (assuming she can show it). She might fill Form 1116 with $9k (30% of $30k total UK tax?) depending on how UK taxed it. Actually, if it was taxed at entity level not flow-through, careful: She might not get a direct credit since the partnership was foreign (some cases allow âdeemed paidâ foreign tax credits only for certain corporate ownership, not for personal partnerships). This gets complex â point is, sheâll need expert advice to avoid double tax.
If Maria were instead a nonresident alien investing in a U.S. partnership: the partnership would send her a K-1 and a Form 8805 showing any U.S. tax withheld. Maria would then file a 1040-NR to possibly get a refund or settle the final tax, attaching 8805 as proof.
Summary: International dimensions of K-1s introduce withholding taxes, tax credits, and extra reporting (K-2/K-3, 8865, 1040-NR, etc.). Always review if your K-1 indicates something like âforeign taxes paidâ or if you are a foreign investor in a U.S. venture. The U.S. Treasury Department and IRS have been increasing compliance in this area (hence the new K-2/K-3 forms). If you find a K-1 with a Part III, Box 16 (foreign transactions) filled out, pay attention â itâs your clue to handle foreign tax credits or disclosures.
đ¤ Frequently Asked Questions (FAQs)
Q: Do I need to attach my K-1 when I e-file my Form 1040?
A: No. When e-filing, you just input the K-1 data into the tax software. You donât attach the actual K-1 form. The IRS already has it on record; you keep the K-1 for your files.
Q: I didnât receive my K-1 before the tax deadline â should I file without it?
A: No. Itâs best to file an extension if youâre missing a K-1. Donât file without it. You need the K-1 info to report income correctly. Filing without a K-1 risks an IRS notice for unreported income.
Q: Does each partner/shareholder file their own K-1 with the IRS?
A: No. The partnership or S corp files all K-1s with the IRS as part of its return. As a partner/shareholder, you do not separately file the K-1. You just use it to prepare your 1040.
Q: Is K-1 income taxable if I didnât actually get any cash distribution?
A: Yes. K-1 income is generally taxable whether or not you received cash. Itâs your share of the entityâs profit. You might reinvest profits or the entity might retain them, but you still owe tax on your share.
Q: I got a K-1 from a family trust â do I attach it to my 1040?
A: No. Normally you donât attach a trust K-1. Just report the income (interest, dividends, etc.) on the proper 1040 schedules. Keep the K-1 with your records in case of questions.
Q: Do single-member LLCs issue K-1s to the owner?
A: No. A single-member LLC (not electing corporate status) is a disregarded entity for tax. It doesnât file a partnership return, so no K-1. The owner reports all income on Schedule C, E, or F of their 1040 directly.
Q: Can I file my taxes if my K-1 says âTentativeâ or is marked âAmendedâ?
A: Yes, but be cautious. If itâs tentative, itâs not final â better wait for the final K-1. If itâs an amended K-1 that you received after filing, you may need to amend your 1040 to reflect changes.
Q: My K-1 shows federal tax withheld (backup withholding). How do I get credit for that?
A: Yes, you claim it on your 1040. Enter it on the payments section (like withholding). Attach the K-1 (or form showing withholding) to your return so the IRS sees proof of that withheld tax.
Q: Do I report K-1 income on state taxes even if itâs from another state?
A: Yes. Generally, your home state taxes you on all income (with a credit for other state taxes paid). And the state where the income came from may tax it too. You might file a nonresident return there. Always include K-1 income in any state where required.
Q: Will the IRS send me a copy of a K-1 if I lost mine?
A: No. The IRS gets a copy, but they wonât distribute it to you. Contact the entityâs tax preparer or issuer for a duplicate K-1. They are required to provide it. As a last resort, you could request a transcript from IRS, but it might not show all details.