Updated: May 30, 2023
Overview
Partners in a partnership can be:
- Individuals
- 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 their share of the partnership income, whether distributed or not.
Filing requirements for Partnerships
Returns are due annually, by the 15th day of the third month after the close of the partnership's taxable year, calendar or fiscal. See Technical Information Release (TIR) 17-5.
Partnership must issue Schedules 3K-1 to individual partners. Copies of Schedules 3K-1 must be submitted to the Department of Revenue with Form 3.
The state forms to file are the Form 3 and Schedule 3K-1.
The federal forms to file are Form 1065 or 1065B & Schedules K-1.
Refer to Technical Information Release (TIR) 16-9 for detailed information about filing requirements. Learn more about electronic payment options.
Form 3
A partnership must annually report the partnership's income to the Department of Revenue on a Form 3, Partnership Return of Income if:
- It has a usual place of business in Massachusetts, or
- Receives federal gross income of more than $100 during the taxable year.
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.
For detailed information on Form 3 or Schedule 3K-1 see the Form 3 Instructions. For additional detail on federal filing obligations, visit the IRS.
A partnership that is not engaged in any business or income-producing activity and is not required to file a federal Form 1065 or 1065B for that reason is not required to file Form 3. However, the income of such a partnership must be taken into account by the partners on their Massachusetts personal income tax returns.
Schedule 3K-1
Partnerships must also annually issue a
- Schedule 3K-1 to each partner, and send a copy to the Department of Revenue.
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 |
For detailed information on Form 3 or Schedule 3K-1 see the Form 3 Instructions. For additional detail on federal filing obligations, visit the IRS.