The partnership must not receive a request from any partner for a Schedule K-3 on or before one month before the due date (without extension) of the partnership’s Form 1065. No 2022 Schedule K-3 requests by the 1-month date The notification must state the partners will not receive Schedule K-3 from the partnership unless the partners request the schedule. The 2023 deadline for filing the partnership’s 2022 Form 1065 – without extension – is January 15, 2023. Citizen/resident alien partnersĭuring the 2022 tax year, all direct partners must be one of the following:Īssuming a partnership meets the first two criteria, a notification must be sent to all partners –electronically or by mail – dated no later than two months before the due date without extension for filing the partnership’s 2022 Form 1065.

Essentially, the partnership is permitted to have a minor amount of foreign taxes withheld on stocks, mutual funds, etc. The instructions provide a detailed definition of what constitutes permissible “foreign activity.” This limited, or “de minimis,” exception is a key change from last year.

The domestic partnership does not have foreign activity, or if it does, the activity is very limited. It provides that a domestic partnership doesn’t need to complete and file the schedules or furnish the schedules to a partner if the partnership meets four criteria and specific date requirements for a partnership’s tax year 2022. However, the draft instructions create a “Domestic filing” exception. Who must file 2022 schedules K-2 and K-3?įirst, the general rule is that all partnerships must file Schedules K-2 and K-3 unless the partnership meets an express exception. Under the instructions, partnerships do not have to file these two schedules if the four criteria and the notification dates described below are met. In these draft instructions, the IRS responded to their calls for expanded relief and clarity by adding a new “Domestic filing exception” for partnerships in draft instructions for the 2022 tax year schedules K-2 and K-3. On October 25, 2022, the IRS issued a draft set of instructions for a partnership’s 2022 Schedule K-2s and K-3s. Since early 2022, tax pros have argued that they should not have to file Form 1065 K-2 and K-3, especially for businesses with no foreign activity and no foreign owners.

Example 1065 partnership return