Partners in a partnership can be individuals, or other businesses and organizations such as corporations and trusts. A partnership is formed when two or more individuals or organizations decide to go into business together.
A partnership is not directly subject to income tax. Instead, each partner is taxed on the partner's share of the partnership income, whether distributed or not. If the partnership has a usual place of business in Massachusetts, or receives federal gross income of more than $100 during the taxable year it must annually report the partnership's income to the Department of Revenue on Form 3 , Partnership Return of Income. Although no tax payments are made with the Form 3, the partnership is subject to penalties for failure to file or late filing of this return.
Partnerships must also annually issue a Schedule 3K-1 to each partner, reporting each partner's distributive share of partnership income, and send to the Department of Revenue copies of all Schedules 3K-1 issued. Each partner must report the partner's distributive share of each item of partnership income reported on the Schedule 3K-1 on the partner's Massachusetts tax return.
For detailed information on Form 3 and Schedule 3K-1, see the Form 3 Instructions. For additional detail on federal filing obligations, use the Federal link below.
*Filing requirements for Partnerships | *Form to file | |
|---|---|---|
| State | Federal | |
Returns are due annually, by of 15th day of the fourth month after the close of the partnership's taxable year, calendar or fiscal.
| Form 3 & Schedules 3K-1 | Form 1065 or 1065B & Schedules K-1 |
*Important Note: Electronic filing requirements are in place for this tax type. Refer to Technical Information Release (TIR) 04-30 for detailed information. Learn more about electronic payment options. | ||
The following table shows which return each type of partner should use to report Schedule 3K-1 income:
| Type of partner | Form to file |
|---|---|
| Full-year resident individual | Form 1 |
| Nonresident/part-year resident individual | Form 1-NR/PY |
| Trust or estate | Form 2 |
| Domestic or foreign corporation | Form 355 |
| Domestic or foreign corporation (part of a MA combined group) | Form 355C |
| Domestic or foreign S corporation | Form 355S |
| Corporate trust | Form 3F |