Expanded domestic filing exception. The IRS is broadening the scope for criterion 2 of the domestic filing exception beginning with tax year 2024. Additionally, the IRS is amending the domestic filing exception for criterion 4 to require partners and shareholders to request a Schedule K-3 annually. However, if a partner requests the Schedule K-3, they may opt to receive it automatically in subsequent years without submitting a new request each year.
New small partnership Schedule K-2 and Schedule K-3 filing exception. Beginning for tax year 2024, partnerships that answered “Yes” to question 4 on Schedule B of Form 1065 are no longer required to file Schedules K-2 and K-3. Partnerships will be subject to the same notification requirements for the domestic filing exception.
See Form 1065, Schedules K-2 and K-3 filing requirements, for more information.