SC1065: Partnership Return (2024)

Who files this form

Every domestic or foreign partnership doing business or owning property in South Carolina must file SC1065. This includes a multiple-member LLC that is not taxed as a corporation.

Each partner must report their share of the partnership's net income or loss on their own return, whether or not it was distributed. A qualifying partnership may elect to have its active trade or business income taxed at the partnership level.

When it's due

• 2024 SC1065 filing and payment: File the return and pay all taxes due by the 15th day of the third month following the end of the partnership's taxable year.
• 2024 nonresident withholding statements: Provide each nonresident partner with a federal 1099-MISC marked "SC Only," showing income and tax withheld, by the 15th day of the third month following the end of the partnership's taxable year.
• Extensions: A filing extension does not extend the time to pay. Pay any Withholding and Income Tax by the original due date to avoid late penalties and interest.

What you'll need

Have these documents and details ready:

• A complete copy of your federal return to attach, including federal Schedule K information used to prepare Schedule SC-K.
• An SC1065 K-1 for each partner. Attach each K-1 to the return and give a copy to the partner.
• The partnership's name, address, FEIN, county code, and partner counts.
• Your extension payment and estimated tax payment amounts.

Depending on your return, also include:

• Active Trade or Business election: Form I-435 to identify the income and calculate the tax.
• Nonrefundable tax credits: SC1040TC and the specific tax credit schedules.
• Tax withheld claimed on line 11: The supporting I-290 or 1099-MISC.
• Nonresident partners: A schedule listing each partner's name, address, tax identification number, South Carolina taxable income, and tax withheld. Include I-309 affidavits, I-338 Composite Return Affidavits, or statements from tax-exempt partners if they have not already been filed with SCDOR.
• Direct deposit: Your account type, routing number, and bank account number for a US account.

How to file

1. Complete Schedule SC-K and the SC1065 K-1s before completing SC1065.
2. Complete SC1065, attach the required documents, and have a general partner or LLC/LLP member sign and date the return.
3. File electronically or mail the paper return as described below.

Electronic filing

You can file SC1065 and your federal partnership return electronically in a single transmission. Visit dor.sc.gov/biz-services for electronic filing options. If you owe $15,000 or more on any SCDOR return, you must file and pay electronically.

Mailing addresses

For a balance due:

SCDOR

Taxable Partnership

PO Box 125

Columbia, SC 29214-0036

For zero tax:

SCDOR

Nontaxable Partnership

PO Box 125

Columbia, SC 29214-0037

Payment

Pay online through MyDORWAY at dor.sc.gov/pay. Select Business Income Tax Payment and use your FEIN to get started.

If paying by check, put the partnership name, FEIN, tax year, and SC1065 in the memo and attach the check to the paper return. Do not send cash.

Common mistakes

• Treating an extension as extra time to pay. There is no extension of time to pay. Late payment results in additional penalty and interest.
• Forgetting election or extension boxes. Mark the extension box if you filed a federal or state extension. If making the Active Trade or Business election, mark the box on SC1065 and on all SC1065 K-1s provided to partners.
• Using nonrefundable credits against withholding tax. These credits cannot reduce nonresident withholding tax. Credits taken by the partnership are not also passed through to partners.
• Reducing previously reported withholding on an amended return. You cannot amend the partnership return to decrease withholding shown on SC1065 K-1s already provided to partners.
• Using the wrong composite extension form. Use SC4868, not SC8736, to request an extension for a composite return. Mark the Composite Filer box.
• Entering incomplete or incorrect direct deposit details. SCDOR will mail a paper check if the account information is incomplete or incorrect. Do not use a deposit slip to verify the routing number, and do not include hyphens, spaces, special symbols, or the check number in the bank account number.

Questions people ask

How do I request more time to file?

Pay your balance due through MyDORWAY at dor.sc.gov/pay and select Business Income Tax Payment. The payment automatically submits your filing extension request, with no additional paperwork. To request an extension by mail, use SC8736. If no tax is due, a requested federal extension is accepted if SCDOR receives your return within the time extended by the IRS. An extension does not give you more time to pay.

Must the partnership withhold tax for nonresident partners?

Generally, partnerships must withhold 5% of nonresident partners' South Carolina taxable income. Withholding is not required for partners who provide an I-309 affidavit, are included on a composite Individual Income Tax return, or are tax-exempt under IRC 501(a). Active trade or business income taxed at the partnership level is also exempt from nonresident withholding.

Can I apply an overpayment to next year's estimated tax?

Yes. Enter the amount you want credited to next year's Estimated Tax on line 17. The remaining overpayment is entered as your refund on line 18.

What if the IRS adjusts the federal partnership return?

Amend SC1065 whenever the IRS adjusts your federal Form 1065. Mark the Amended return box.

Official sources

• https://dor.sc.gov/sites/dor/files/forms/SC1065_2024.pdf