M3BBA: Partnership Audit Report (2025)
Minnesota · Minnesota DOR · Used for tax years 2025
Minnesota Form M3BBA, Partnership Audit Report, reports federal adjustments for a reviewed year and allocates them among partner types. It calculates Minnesota tax on the adjustments, with the total carried to Form M3X, and includes a schedule of nonresident indirect partners.
Who files this form
File Schedule M3BBA only if your partnership elects to report and pay Minnesota tax at the partnership level for federal BBA centralized partnership audit changes that affect Minnesota tax liability. Include it with Form M3X, Amended Partnership Return.
If the audited partnership does not make this election, a tiered partnership partner may choose to make the election itself.
Your partnership cannot make the election if:
- The federal adjustments result in unitary business income to a corporate partner required to file as part of a combined report.
- Any final federal adjustments result from an administrative adjustment request.
- The partnership has no Minnesota reporting or payment obligations.
When it's due
For the tax year 2025 M3BBA, the printed deadlines for a partnership making the partnership pays election are:
- File Form M3X and Schedule M3BBA: No later than 90 days after the final determination date of the federal audit change.
- Pay the partnership-level tax: No later than 180 days after the final determination date.
These are deadlines measured from the final determination date, not fixed calendar dates. For an IRS audit, that date is generally the first day when no adjustment from the audit remains to be finally determined, whether by agreement or a final decision after appeal rights have been waived or exhausted.
What you'll need
Have these forms and records ready:
- Form M3X: Schedule M3BBA must be filed with it as a supplemental schedule.
- Federal partnership audit report: Attach federal Form 15027 and Form 886-A to Schedule M3BBA.
- Corrected Form M3A for the reviewed year: Use the apportionment percentage from line 5c, incorporating the applicable federal adjustments.
- Partnership information: Reviewed-year beginning and ending dates, partnership names, federal ID numbers, and Minnesota Tax ID numbers.
- Partner allocation information: Distributive shares, partner types, and relevant residency or domicile information.
- Nonbusiness income breakdown: Include an attachment showing the income reported on line 11.
- Minnesota modification explanations: Include explanations for modifications entered on lines 20, 23, 27, and 33.
- Nonresident indirect partner details, if applicable: Names, tax ID numbers, addresses, amounts assigned to their state of residency or domicile, and residency information for Part 9. Attach additional Parts 9 if more than 10 such partners are identifiable.
How to file
- Complete a separate Schedule M3BBA for each reviewed year covered by the federal audit. File each schedule with the appropriate tax year's Form M3X.
- Attach the federal partnership audit report, federal Form 15027 and Form 886-A, and the required supporting explanations and schedules.
- Enter the total tax from M3BBA line 38 on Form M3X line 5.
- Have the state partnership representative sign Schedule M3BBA.
The state representative is the federal partnership representative unless you designate a different person using page 4.
The supplied text does not give a mailing address or e-filing method for filing M3BBA and M3X. The mailing address printed in the text is specifically for revoking a representative designation, not for filing the return.
Common mistakes
- Filing M3BBA without making the election: Only file it when electing to pay the federal audit changes at the partnership level.
- Leaving partners out of Part 2: Include all partners not excluded in Part 1. Carry lines 6 through 10 to five decimal places, and make sure line 10 equals 1.00000.
- Counting exempt partners twice: Do not include the same direct exempt partners on both lines 2 and 6.
- Including domicile-assigned amounts on line 15: The form specifically says not to include those amounts there.
- Including partner-level tax attributes in modifications: Do not include these on lines 20, 23, 27, or 33. Line 20 also specifically excludes net operating loss modifications.
- Claiming amounts for unverified nonresident indirect partners: Do not list a partner in Part 9 or include a related amount on line 31 if you cannot determine that the partner is not a Minnesota resident.
- Leaving the representative designation unsigned or undated: The designation is not valid until someone with legal authority signs and dates it.
Questions people ask
What is the reviewed year?
It is the partnership tax year subject to the partnership-level audit that produced the federal adjustments. If an audit covers multiple tax years, use a separate M3BBA for each reviewed year.
Does the election mean partners do not have to report their shares separately?
Unless a partner is excluded from the calculation by Minnesota statute, the partnership-level payment election relieves the partner from filing a return to report their pro rata share of the federal adjustments.
What happens if the partnership does not make the election?
The partnership and each partner must file amended Minnesota returns for the reviewed years and report their pro rata shares of the federal adjustments. A tiered partnership partner may instead choose to make its own partnership-level payment election.
Who must sign Schedule M3BBA?
The state partnership representative must sign. This is the federal partnership representative unless the partnership designates a different person using page 4.
Can the partnership make estimated payments while an IRS audit is pending?
Yes. The partnership may make estimated payments toward the expected tax liability. If it plans to elect partnership-level payment, those payments should be made under the partnership's Minnesota ID number. The text directs filers to the M3X instructions for payment details.