Pass-Through Entity-Level Tax: Partnership Tax Payments and Transferability Questions

Effective for taxable years beginning on or after January 1, 2019

    1. Can the partnership get credit for estimated tax payments made by its partners, or vice versa depending on whether an election is made?

    2. Can an electing partnership transfer payments from the entity's pass-through withholding account (Form PW-ES payments) to the entity-level tax account (Form 3-ES payments)?

    3. Can an electing partnership transfer payments from the entity-level income tax account (Form 3-ES payments) to the entity's pass-through withholding account (Form PW-ES payments)?

    4. Is an electing partnership required to make quarterly estimated tax payments?

    5. How does a partnership make a payment if there is an amount due with the return?

    6. How does a partnership make a payment for an amount due on an amended return?

    7. In the first year a partnership makes an election to pay tax at the entity level, is the partnership subject to underpayment interest on late estimated tax payments even if the prior year Wisconsin tax liability for the partnership was zero?

    8. If an electing partnership does not pay the full amount of taxes due by the unextended due date of the entity's Wisconsin tax return, what interest rate will apply?

    9. Is an electing partnership required to make pass-through withholding tax payments for nonresident partners?

    10. If an electing partnership made withholding tax payments for a nonresident partner, how does the withholding get refunded?

    11. Does the entity-level tax election change how a partnership reports its nonresident entertainer withholding paid by another person on its behalf?


Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations in effect as of January 22, 2020: Sections 71.03, 71.05, 71.09, 71.20, 71.21, 71.75, 71.775, 71.82, 71.84 and 73.03, Wis. Stats.

Laws enacted and in effect after January 22, 2020, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to January 22, 2020, that is contrary to the information in this document is superseded by this document, pursuant to sec. 73.16(2)(a), Wis. Stats.

FOR QUESTIONS OR COMMENTS CONTACT:

MS 5-77
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2772
Fax: (608) 267-1030
Email additional questions to DORIncome@wisconsin.gov

Guidance Document Number: 100183

January 22, 2020