Chat with an FTB Representative

Tax News
Attach California Schedule K-1s to avoid Erroneous Contacts to Your Partners, Members, and Shareholders

We are concerned about what we call “erroneous contacts”; sending notification or correction letters when we do not have to. We send letters to individuals that we believe have a filing requirement and have not yet filed their tax return. For example, we send a notice to individuals who receive pass-through income, which is reported on Federal and California K-1s. Some of these partner, member, and shareholder contacts can be avoided. We need your help to avoid this situation.

The issue is that business entities/partnerships doing business within and outside of California have filed returns without attaching California Schedule K-1s; instead they include the necessary information in schedule(s) attached to the Federal K-1. The importance of the California Schedule K-1 form is that it reflects the accurate California sourced income in a format that our systems recognize. If our systems do not recognize the attached schedule reporting the partner’s, member’s, or shareholder’s income, or lack thereof, we send a letter communicating a filing requirement, when we should not. Use the California Schedule K-1 to avoid this.

Business entities/partnerships filing 565, 568, or 100S returns are required to attach one copy of each (CA) Schedule K-1 to the return (565, 568, or 100S) filed with FTB. The (565, 568, and 100S) tax booklets provide instructions on filing via computer software, magnetic media, CD, or diskette. Visit our website at ftb.ca.gov, click on the “Forms and Publications” tab for more filing information.

Back to March 2011 Tax News