The timing of your Schedules K-1 (and K-3, if applicable) will depend on how quickly your partnership or S corporation can finalize its business returns and issue you the Schedules K-1 and K-3. Right now, these forms are somewhat of a moving target.
As of late February 2022, the IRS continued to release new guidance and FAQs on Schedules K-2 and K-3. As it did so, it provided much needed clarifications on how the new forms must be completed and by whom. Businesses and tax practitioners are being cautious with the new filings since failure to properly complete or file the new schedules may subject the business and its owners to separate $10,000 penalties.
A few different factors may affect the timing for partnerships and S corporations to file their tax returns (and provide you with Schedules K-1 and K-3):
- As with any new form, it’s taking time for businesses to understand the Schedule K-2 and K-3 requirements, obtain the information, and comply.
- Since the IRS continues to update its guidance on these new forms, some companies are waiting for more clarity before they spend time or resources preparing the forms.
- Most businesses e-file their returns. Given the mail backlog at the IRS, many partnerships and S corporations want to be sure they can submit the new Schedules K-2 and K-3 as part of their e-filed tax returns rather than mailing their returns to the IRS.
The IRS has released a timeline for accepting e-filed returns with the new Schedules K-2 and K-3. The e-file release dates for partnerships (Form 1065) and S corporations (Form 1120-S) are given below.
Form Number Date Available
Form 1065, Schedules K-2 and K-3 March 20, 2022
Form 1120-S, Schedules K-2 and K-3 Mid-June 2022
Form 8865, Schedules K-2 and K-3 January 2023
Fortunately, the IRS is also offering a temporary workaround to enable businesses to e-file their returns sooner, before the official e-file dates. For a limited time, the IRS is allowing businesses to e-file their returns with Schedules K-2 and K-3 included as a PDF attachment (rather than in the body of the return itself). This is not typically an option for forms and schedules that are a required component of a tax return. In this case, however, the IRS has made an exception, to enable companies and individuals to continue e-filing while the IRS finishes updating its regular e-file technology.
This is good news for individuals expecting Schedules K-1 and K-3. If businesses choose to use this workaround, then they can finalize their returns—and issue you your Schedules K-1 and K-3—sooner.