PA-20S/PA-65 Schedule RK-1: 2024 PA Schedule RK-1 - Resident Schedule of Shareholder/Partner/Beneficiary Pass Through Income, Loss and Credits (PA-20S/PA-65 RK-1) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
Pennsylvania Schedule RK-1 reports a resident shareholder’s, partner’s, member’s or beneficiary’s share of pass-through income, losses and credits. It also reports distributions, guaranteed payments and other information needed for the owner’s Pennsylvania tax return.
Who files this form
PA Schedule RK-1 reports each Pennsylvania resident owner's share of pass-through income, losses and credits. A separate schedule must be completed for each resident owner of a partnership, PA S corporation, estate, trust or LLC classified as a partnership or S corporation for federal income tax purposes. Resident owners can include individuals and other pass-through entities.
Special residency rules apply:
- PA S corporation shareholders: Prepare a separate RK-1 for the portion of the year a part-year shareholder was a Pennsylvania resident.
- Partners: Prepare an RK-1 if the partner was a Pennsylvania resident at year-end, at death during the year, or when the partner disposed of their entire partnership interest. Resident partners do not prorate income based on days of residency.
An RK-1 does not need to be issued to a C corporation taxpayer unless a credit from PA Schedule OC has been allocated.
What you'll need
Have the entity's PA-20S/PA-65 Information Return and the information needed to identify the entity and owner, including names, addresses, SSN or FEIN, and ownership percentages.
Depending on the amounts reported, include these supporting documents:
- Line 8, resident credit: A statement showing the states, Pennsylvania income classes, taxes paid and resident credit claimed. Include the entity's name, FEIN, tax year, owner names and owner tax identification numbers. Submit copies of out-of-state composite returns for all resident credits claimed.
- Line 9, other credits: A statement identifying the credits passed through, with the same entity and owner identification details.
- Line 12, guaranteed payments: If payments cover more than one income class, a statement breaking down the amounts by class.
- Line 16, basis adjustments: A statement listing permanent nontaxable income and nondeductible expenses, with the entity's name, FEIN and tax year.
How to file
Submit a copy of each owner's Schedule RK-1 with the entity's PA-20S/PA-65 Information Return. Give owners copies so they can prepare their Pennsylvania returns. The PA S corporation or partnership must also keep copies in its records.
Partnerships, PA S corporations, estates, trusts and LLCs must submit Schedule RK-1 with their applicable Pennsylvania tax returns. Amounts on the schedule must be reported on the appropriate Pennsylvania tax return.
The text addresses paper and electronically filed returns but does not provide a mailing address or step-by-step e-file directions. It refers readers to WHERE TO FILE in the PA-20S/PA-65 Information Return instructions.
To correct a schedule, use a blank schedule for the tax year being amended, mark the Amended Schedule oval and enter the corrected information. Submit it with an amended PA-20S/PA-65 Information Return. Do not send a copy of the original schedule.
Common mistakes
- Entering cents: The form requires whole dollars only.
- Leaving amounts off the owner's return: The form reminds owners to report the schedule's amounts on the appropriate Pennsylvania tax return.
- Including guaranteed payments on Line 1: These payments should not be included there.
- Using Line 8 for an entity-level tax credit: The instructions specifically prohibit this.
- Including federal and Pennsylvania depreciation differences on Line 16: This line is only for permanent differences needed to calculate the owner's basis.
- Deducting Line 17 again: The Section 179 amount is informational and has already been deducted from the applicable income class.
- Sending an amended RK-1 alone: An amended PA-20S/PA-65 Information Return must accompany it.
- Submitting schedules on CD-ROM: These will not be processed, and the entity may face a $250 non-filer penalty for each missing schedule.
Questions people ask
Do I owe Pennsylvania tax if the entity did not distribute the income?
Yes. Pennsylvania resident individual owners are taxed on their share of the entity's income whether or not it is distributed, and regardless of its source.
Does an entity that owns another entity receive both RK-1 and NRK-1?
Yes. The text states that an entity that owns another entity receives both schedules.
How do part-year residency rules differ for shareholders and partners?
PA S corporation shareholders have income allocated based on days of Pennsylvania residency. Partners generally use residency status at year-end and do not prorate income. Separate rules apply when a partner dies or disposes of their entire interest during the year.
What if a partnership distribution exceeds my basis?
For distributions reported on Line 10, the partner reduces their basis by the distribution amount. Any amount exceeding basis must be reported as taxable gain on the resident partner's Schedule D.