N-35 Sch. K1: Shareholder’s Share of Income, Credits, Deductions, etc. (Form N-35) (2024)
Hawaii · Hawaii DoTax · Used for tax years 2024
Hawaii Schedule K-1 (Form N-35) reports a shareholder’s share of an S corporation’s income, losses, credits, deductions, and other tax items. It separates amounts attributable to Hawaii from amounts attributable elsewhere.
Who files this form
The S corporation prepares Schedule K-1 (Form N-35) for each shareholder to report that shareholder’s share of income, credits, deductions, and other items.
As a shareholder, you must include your share of the corporation’s income on your tax return, whether or not the corporation distributed it to you. Keep your Schedule K-1 for your records.
What you'll need
Have these items available, as applicable:
- Your Hawaii Schedule K-1 (Form N-35), including supplemental information on line 30 and any attached statements.
- Your federal Schedule K-1 (Form 1120S), to check for differences from the Hawaii amounts.
- The Shareholder’s Instructions for Schedule K-1, which the form tells you to read before entering amounts on your return.
- The Form N-11 or N-15 instructions and their Hawaii Additions and Subtractions Worksheets if federal and Hawaii Schedule K-1 amounts differ.
- Form 1099-DIV for actual dividend distributions paid by the corporation. Those distributions are not shown on Schedule K-1.
- Applicable credit attachments, such as Form N-756A, Form N-342A, or Form N-312, Part II, where indicated on the schedule.
To prepare the schedule, the corporation needs the shareholder’s identifying number, name, address, ownership percentage, and number of shares owned at year end, along with the corporation’s name, address, and federal identifying number.
How to file
The corporation must prepare Schedule K-1 in triplicate for each shareholder:
- Copy 1: File with Form N-35.
- Copy 2: Keep as the S corporation’s copy.
- Copy 3: Provide as the shareholder’s copy.
Shareholders use the schedule and the referenced instructions to report the items on their Hawaii income tax returns, and keep the schedule for their records.
The supplied form text does not give a mailing address or e-filing instructions.
Common mistakes
- Entering amounts without checking the instructions. The form cautions you to read the Shareholder’s Instructions for Schedule K-1 before entering information on your tax return.
- Overlooking differences between federal and Hawaii amounts. If your federal and Hawaii Schedule K-1 amounts differ, make the necessary adjustments in the Hawaii Additions Worksheet and/or Hawaii Subtractions Worksheet in the Form N-11 or N-15 instructions, as applicable.
- Discarding your copy. The form tells shareholders to keep Schedule K-1 for their records.
Questions people ask
Do I report income even if the corporation did not distribute it to me?
Yes. You are liable for income tax on your share of the corporation’s income, whether or not it was distributed, and must include your share on your tax return.
Does Schedule K-1 show actual dividend distributions?
No. The corporation must report actual dividend distributions to you on Form 1099-DIV. For resident shareholders filing Form N-11, those distributions are already included in federal adjusted gross income.
How does my residency affect which amounts I use?
Hawaii residents report the total of income, deductions, and credits attributable to Hawaii and elsewhere. Nonresidents and part-year residents use both the Hawaii-attributable amounts and the combined totals when preparing their Hawaii income tax returns.
Where do I find details for lines marked “attach schedule”?
For lines 10, 12, 13, 14, and 22a, applicable details appear on line 30 or in an attached statement if more space was needed.