Schedule K-1-P(3): Pass-through Withholding Calculation for Nonresident Members (2025)
Illinois · Illinois DOR · Used for tax years 2025
Illinois Schedule K-1-P(3) calculates pass-through withholding for a partnership’s or S corporation’s nonresident partner or shareholder. It uses the member’s Illinois income, modifications, and tax credits to figure the total withholding. Keep this schedule with your income tax
Who files this form
Partnerships filing Form IL-1065 and S corporations filing Form IL-1120-ST must complete Schedule K-1-P(3) for each nonresident partner or shareholder who has not submitted Form IL-1000-E to them.
Do not complete this schedule:
- For a resident member.
- For a member who has submitted Form IL-1000-E to you.
- If you have elected to pay Pass-through Entity Tax.
The 2025 schedule applies to tax years ending on or after December 31, 2025, and before December 31, 2026. Keep the schedule with your income tax records rather than routinely submitting it.
What you'll need
Have these forms and details available to complete the schedule:
- Your Form IL-1065 or Form IL-1120-ST, showing the entity’s name, and your federal employer identification number (FEIN).
- The nonresident member’s name, Social Security number or FEIN, and organization type.
- The member’s Schedule K-1-P, including the income, addition, and subtraction amounts used in Lines 6 through 11.
- The amounts of Illinois replacement tax investment credits and Illinois income tax credits passed to the member and available for use this year.
- Any Form IL-1000-E submitted by the member, to determine whether this schedule should be completed.
How to file
Keep a copy of Schedule K-1-P(3) for each member with your income tax records. Do not send it to your members or submit it to the Illinois Department of Revenue unless the department specifically requests it. You must provide the information if requested.
Report the total pass-through withholding from Line 19 in both places:
- The member’s Schedule K-1-P, Step 7, Line 55.
- Your Form IL-1065 or Form IL-1120-ST, Schedule B, Section B, Line J, on the line for that member.
Common mistakes
- Completing the schedule when it does not apply. Do not complete it for resident members, members who submitted Form IL-1000-E, or if you elected to pay Pass-through Entity Tax.
- Sending the schedule unnecessarily. Keep it in your records. Do not send it to members or to the Illinois Department of Revenue unless the department specifically requests it.
- Missing the organization-type skip rules. For a nonresident individual or estate, enter zero on Lines 13 through 15 and go to Line 16. For a nonresident partnership or S corporation, enter zero on Lines 16 through 18 and go to Line 19.
- Entering a negative result where zero is required. On Lines 12, 15, and 18, enter zero if the subtraction produces a negative amount.
- Overlooking instructions referenced on the form. Lines 6 and 7 say to read the instructions before completing them. Line 11 also directs certain members with Illinois August 1, 1969, appreciation amounts or retirement payments to the instructions.
Questions people ask
Do I give this schedule to the nonresident member?
No. Keep it with your income tax records. Report the member’s total pass-through withholding on their Schedule K-1-P, Step 7, Line 55.
What if the member submitted Form IL-1000-E?
Do not complete Schedule K-1-P(3) for that member.
What if the entity elected to pay Pass-through Entity Tax?
Do not complete Schedule K-1-P(3).
Which replacement tax rate does the schedule use?
Line 13 uses 1.5% for a partnership, S corporation, or nonresident trust, and 2.5% for a corporation. For a nonresident individual or estate, the form says to enter zero on Lines 13 through 15.
Where do I report the final withholding amount?
Report Line 19 on the member’s Schedule K-1-P, Step 7, Line 55, and on your Form IL-1065 or Form IL-1120-ST, Schedule B, Section B, Line J, on that member’s line.