In late 2021, the IRS announced that it would not begin accepting Schedules K-2 and K-3 until end of March 2022 at the earliest. Since this timeframe is after the March 15 due date for 2021 Forms 1120-S, the IRS indicated that any S corporations needing to file these schedules should plan to request an extension of time to file.
The IRS is focusing on partnerships first (before individual filers and S corporations with Schedules K-2 and K-3). At this time, S corporation e-filing is not slated until mid-June.
Although the official timeframe for e-filing Schedules K-2 and K-3 is mid-June, the IRS has now provided a workaround to allow S corporations to e-file by the March 15 due date. S corporations can e-file by March 15 if Schedules K-2 and K-3 are included as an attachment to the return (rather than as forms within the return). This method is not typically allowed for e-filing of mandatory tax forms and schedules. In this case, however, the IRS has made a temporary exception.
One caveat: as of February 2022, the IRS was still updating its guidance and filing instructions for the Schedules K-2 and K-3. Also, S corporations and tax practitioners were still seeking additional guidance from the IRS on completion of these forms. Given the ongoing changes and updates, it’s unclear if all details will be sorted by March 15, and some S corporations may benefit from delaying their filings.
