When Do K-1s Need to Be Issued? Key Tax Deadlines

A Schedule K-1 is an Internal Revenue Service (IRS) tax document that reports an individual’s share of income, losses, deductions, and credits from a pass-through entity. It informs partners, S corporation shareholders, or beneficiaries of estates and trusts about their portion of the entity’s financial activity for the tax year. Recipients use this information to prepare their personal income tax returns for proper reporting.

Types of Entities Issuing K-1s

Several entity types issue Schedule K-1s to owners or beneficiaries. Partnerships file Form 1065, U.S. Return of Partnership Income, and furnish a K-1 to each general and limited partner. Partners report their share on Form 1040.

S corporations, which pass income, losses, deductions, and credits to shareholders, file Form 1120-S, U.S. Income Tax Return for an S Corporation. Each shareholder receives a Schedule K-1 (Form 1120-S) detailing their share. Estates and trusts also issue Schedule K-1 (Form 1041) to their beneficiaries, reporting distributed income for personal tax filings.

Standard K-1 Issuance Deadlines

K-1 issuance deadlines align with the entity’s tax return filing deadlines. For partnerships filing Form 1065 and S corporations filing Form 1120-S, the standard deadline to file returns and issue K-1s is March 15. This applies to calendar year entities.

Estates and trusts, which file Form 1041, generally have until April 15 to file their income tax returns and provide K-1s to their beneficiaries. If any of these entities operate on a fiscal year rather than a calendar year, their deadlines shift to the 15th day of the third or fourth month following the close of their tax year, depending on the entity type.

Extensions for Issuing K-1s

Entities needing more time to prepare tax returns can request an extension, extending the K-1 issuance deadline. Filing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, provides an automatic extension for partnerships and S corporations. This typically pushes their K-1 issuance deadline from March 15 to September 15.

Estates and trusts can also obtain an extension for filing Form 1041 by using Form 7004. This extends their filing and K-1 issuance deadline, generally moving it from April 15 to September 30. These forms grant an extension to file the return and issue K-1s, but they do not extend the time to pay any taxes due.

Consequences of Late K-1 Issuance

Late K-1 issuance, even with extensions, can lead to IRS penalties. Penalties are assessed for late filing of information returns. Penalty amounts vary by entity size and delay length.

For instance, penalties can range from $260 to $320 per K-1 for delays or incorrect information. If the failure to report correct information is intentionally disregarded, the penalty per K-1 can increase to $520 or 10% of the aggregate amount required to be reported, with no maximum limit. Beyond penalties for the issuing entity, delayed K-1s inconvenience recipients who need them to file personal tax returns.