When Are K-1s Due to Partners? Deadlines & Extensions

A Schedule K-1 (Form 1065) is a tax document issued by partnerships to their partners. It reports a partner’s share of the partnership’s income, losses, deductions, and credits. This form allows partners to accurately report their portion of the partnership’s financial activities on their individual income tax returns, typically Form 1040. Timely delivery of the Schedule K-1 is important for partners to meet their own tax filing obligations.

Standard K-1 Due Dates

For most partnerships, the due date for issuing Schedule K-1s to partners aligns with the filing deadline for Form 1065, the U.S. Return of Partnership Income. For calendar year partnerships, this date is March 15th following the close of the tax year. By March 15th, the partnership must file Form 1065 with the IRS and provide each partner with their Schedule K-1.

Partners rely on the information in their K-1 to prepare and file their personal income tax returns. The Internal Revenue Service (IRS) requires this information to ensure proper reporting of pass-through income, which is taxed at the individual partner level rather than at the partnership level.

Partnerships are “pass-through” entities. Profits and losses are passed through to the partners, who report these items on their own tax returns. The K-1 details each partner’s share of the entity’s financial results, including ordinary business income or loss, net rental real estate income, and other specific items that impact a partner’s personal tax liability.

Understanding K-1 Extensions

Partnerships can obtain an automatic six-month extension to file Form 1065 and issue Schedule K-1s to their partners. This extension is requested by filing Form 7004 by the original due date of the partnership return. For calendar year partnerships, this means filing Form 7004 by March 15th.

An approved Form 7004 extends the deadline for both the partnership’s return and the K-1s to September 15th. Many partnerships require additional time to accurately compile necessary financial data, especially those with complex operations or numerous partners.

While the extension grants more time to file the return and provide the K-1, it is important to remember that it is an extension of time to file, not an extension of time to pay any taxes owed. Partners who anticipate owing tax based on their share of partnership income should still make estimated tax payments by the original individual tax deadlines to avoid potential underpayment penalties. The delay in receiving a K-1 often necessitates that partners also file a personal income tax extension (Form 4868) if they cannot complete their individual return by the April 15th deadline without the K-1 information.

Penalties for Late K-1 Delivery

If a partnership fails to file Form 1065 or furnish Schedule K-1s by the original or extended due dates, the IRS can impose penalties. For late filing of Form 1065, the penalty is generally $235 per partner, per month, or part of a month, for a maximum of 12 months. This penalty is multiplied by the total number of persons who were partners in the partnership during any part of the tax year. For example, a partnership with 10 partners could face a penalty of $2,350 per month for late filing.

Beyond the late filing of the partnership return, there are also penalties specifically for failure to furnish information statements, such as K-1s, to recipients by the due date. The penalty for each failure to furnish a Schedule K-1 to a partner when due, or for including incorrect information, can be $260 per Schedule K-1. If the failure to report correct information is due to intentional disregard, this penalty can increase significantly, to $520 or 10% of the aggregate amount of items required to be reported, with no maximum limit. These penalties are designed to encourage timely and accurate reporting, ensuring partners have the necessary information to fulfill their own tax obligations.