K-121S: Combined Income Method of Reporting Schedule for Partnerships/S corporations (Revision)

Who files this form

K-121S is Kansas’s Small Business Combined Income Method of Reporting schedule.

The form says a corporation using the combined income method with more than one entity doing business in Kansas may file one Kansas return reporting the total Kansas combined income and tax. It does not state a separate rule requiring taxpayers to use this schedule.

What you'll need

Have these records and supporting schedules available:

• The name shown on Form K-120S, the employer identification number (EIN), and the taxable year’s beginning and ending dates.
• Separate corporate names and federal identification numbers.
• Federal ordinary income and other income, losses, and deductions from federal Schedule K.
• Records of additions to and subtractions from federal income, with schedules for entries marked “schedule required.”
• Schedules for total-company nonbusiness income, Kansas nonbusiness income, and Kansas income not taxed as part of the election.
• Property, payroll, and sales records for the Kansas and total-company columns in Part II, including beginning- and end-of-year property values.
• Schedules for other tangible assets and other income reported in Part II.

Common mistakes

• Do not leave out supporting schedules for entries marked “schedule required,” “enclose schedule,” or “attach schedule.”
• Explain any eliminations in the space labeled “Explanation of Eliminations.”
• Use the two-factor formula in Part II only if qualified and using that formula, as the form specifies.
• Also enter the amount from K-121S, Part I, line 28 on Form K-120S, line 29.

Questions people ask

Can multiple entities be reported on one Kansas return?

The form says a corporation using the combined income method with more than one entity doing business in Kansas may file one Kansas return reporting the total Kansas combined income and tax.

Where does the Kansas apportionment percentage come from?

Part II, line 6 provides the average percentage from line 4 or line 5, whichever applies. Transfer the percentage for each corporation to Part I, line 21.

How is Kansas taxable income for electing partners calculated?

Subtract line 27, Kansas income not taxed as part of the election, from line 26, total Kansas income. Enter the result on line 28 and also on Form K-120S, line 29.

Where can I find instructions for the Kansas expensing entries?

For the Kansas expensing recapture and deduction entries on lines 24 and 25, the form directs you to the instructions for Schedule K-120EX.

Official sources

• https://www.ksrevenue.gov/pdf/k-121s.pdf