Am I required to file a Wisconsin partnership return?
A partnership or limited liability company treated as a partnership with income from Wisconsin sources, regardless of the amount, must file a Wisconsin partnership return,
Form 3. For example, a partnership must file a return if it has income from any of the following:
Business transacted in Wisconsin,
Personal or professional services performed in Wisconsin,
Real or tangible personal property located in Wisconsin,
Wisconsin lottery prizes, including income from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in Wisconsin, or
A covenant not to compete, if that covenant was based on a Wisconsin-based activity.
A syndicate, pool, joint venture, or similar organization that isn't required to file a federal partnership return because it has elected under Internal Revenue Code (IRC) section 761(a) not to be treated as a partnership for federal income tax purposes may make a similar election for Wisconsin purposes. To make the election, attach a copy of the federal election statement to the Form 3 filed with the Department of Revenue for the year of election.
If the Wisconsin election is made, the organization generally won't have to file Form 3 except for the year of election. However, the department may require the organization to file a return so that a partner's Wisconsin tax liability may be computed.
Publicly traded partnerships treated as corporations under IRC section 7704 must file a Wisconsin corporation franchise or income tax return, Form 4 or 6, instead of Form 3.
Limited liability companies treated as corporations for federal income tax purposes must file a Wisconsin corporation franchise or income tax return, Form 4, 5S, or 6, instead of Form 3.
Single member limited liability companies that are disregarded as separate entities under IRC section 7701 are disregarded as separate entities for Wisconsin purposes. The member is required to include the income and expenses of the limited liability company on the member's return.
Common trust funds are treated as fiduciaries under Wisconsin law and must file Wisconsin Form 2 instead of Form 3.
Note: The Department of Revenue may require a partnership with Wisconsin resident partners to file a Wisconsin partnership return even though it has no Wisconsin business or income so that a Wisconsin resident partner's tax liability may be computed.
Where do I file my Wisconsin returns?
File your returns electronically through the Federal/State E-File program. Form 3 is available for electronic filing, along with most other Wisconsin corporation and partnership forms and supporting schedules. With the Federal/State E-File program, you may electronically file Form 3 along with other Wisconsin and federal returns in a single submission. Or, you can use Federal/State E-Filing to file the Wisconsin forms alone.
For details and a list of approved third party software vendors participating in this program, visit Corporation Franchise and Income and Partnership Tax Returns e-File.
If you choose to file your partnership returns on paper, the mailing address for Form 3 is given below:
If the partnership completed Part I of Form 3:
Wisconsin Department of Revenue
PO Box 8908
Madison WI 53708-8908
If the partnership only completed Part II of Form 3:
Wisconsin Department of Revenue
PO Box 8965
Madison WI 53708-8965
What is the deadline for filing my Wisconsin return?
A partnership must file its partnership return, Form 3, by the 15th day of the 4th month following the close of its taxable year.
If Form 3 is filed late, without an extension, the partnership may be subject to penalties and interest.
A return is considered filed by the due date if it is submitted electronically on or before the due date or if:
The return is mailed in a properly addressed envelope with the postage duly prepaid,
The envelope containing the return is postmarked on or before the due date, and
The return is received by the department within 5 days of the due date.
"Mailed" includes delivery by a delivery service designated under section 7502(f) of the Internal Revenue Code.
Returns received in person by a Department of Revenue employee are timely filed only if received on or before the due date.
Are extensions available if I can't file my Wisconsin return by the due date?
Any extension allowed by the Internal Revenue Service for filing the federal return automatically extends the Wisconsin due date, provided you attach a copy of the federal extension to your Wisconsin return.
If you are not requesting a federal extension, but you need additional time to file your Wisconsin return, you may obtain an extension available to partnerships under federal law. To receive a Wisconsin extension, you must attach to your Wisconsin return a completed copy of the appropriate federal extension application form or a statement explaining which federal extension provision you are using.
Who is subject to the economic development surcharge?
Prior to January 1, 2013, the economic development surcharge applied to every partnership, including a limited liability company treated as a partnership, that meets the following conditions:
Must file a Wisconsin partnership return, Form 3,
Derives income from business transacted, property located, or services performed in Wisconsin, and
Has $4 million or more of gross receipts for federal income tax purposes.
For taxable years beginning on or after January 1, 2013, the economic development surcharge no longer applies to partnerships or limited liability companies treated as partnerships.
How do I amend my Wisconsin partnership return?
To file an amended Wisconsin return, use Form 3 and check the "Amended return" box on the front of the return. Attach an explanation of any changes made.
If the income, deductions, credits, or other information provided to any partner on Wisconsin Schedule 3K-1 is incorrect, file an amended Schedule 3K-1 for that partner with the amended Form 3. Also give a copy of the amended Schedule 3K-1 to that partner. Check the "Amended 3K-1" box to indicate that it is an amended Schedule 3K-1.
I am filing Form 1065-B, U.S. Return of Income for Electing Large Partnerships, for federal purposes. What form do I file for Wisconsin?
If you are filing federal Form 1065-B, you should file Form 3 for Wisconsin. However, special instructions apply when completing Form 3:
Before starting Form 3, complete federal Form 1065-B and all supporting schedules.
Fill in the name, address, and items A through H at the top of Form 3.
On Schedule 3K, Partners' Distributive Share Items, leave lines 1 through 14 and 16a through 20b blank. Fill in any available credits on lines 15a through 15h and attach the appropriate schedule.
If differences exist between the items of income, loss, and deduction reportable for federal and Wisconsin purposes, attach a schedule as requested on line 20c showing the federal amount, adjustment, and amount under Wisconsin law.
As explained in greater detail in the
Form 3 Instructions, additions to or subtractions from federal amounts may be required for the following reasons:
A federal law doesn't apply for Wisconsin purposes.
Different elections are made for federal and Wisconsin purposes.
Wisconsin law prescribes modifications to federal income, such as the following:
Computed amounts of development zones credits, technology zone credit and enterprise zone jobs credit are added to federal income.
Certain state taxes are not deductible in computing net income.
Most state and local government bond interest is added to federal income.
U.S. government interest is subtracted from federal income.
To calculate the Wisconsin amounts, prepare a "Wisconsin version" of Form 1065-B, substituting the amounts under Wisconsin law for the federal amounts. Enter the amounts from the "Federal version" of Form 1065-B, Schedule K, in the "Federal" column on the supplemental schedule to Form 3 and the amounts from the "Wisconsin version" of Form 1065-B, Schedule K, in the "Wisconsin" column of this schedule. Fill in the difference between the federal and Wisconsin amounts in the "Adjustment" column.
Fill in line 22, columns b and d.
If you were not required to prepare a "Wisconsin version" of Form 1065-B, compute the income by combining the amounts from federal Form 1065-B, Schedule K, lines 1a, 2, 3, 4a, 4b, 7, and 8. Add or subtract, as appropriate, any other taxable income or loss reported separately on a schedule for line 15. This is the income (loss) to enter in both column b and column d.
If you were required to prepare a "Wisconsin version" of Form 1065-B, compute the "Federal" income to enter in column b by combining the amounts from the "Federal version" of Form 1065-B, Schedule K, lines 1a, 2, 3, 4a, 4b, 7, and 8. Add or subtract, as appropriate, any other taxable income or loss reported separately on a schedule for line 15. Compute the "Wisconsin" income to enter in column d by combining the amounts from the "Wisconsin version" of Form 1065-B, Schedule K, lines 1a, 2, 3, 4a, 4b, 7, and 8. Add or subtract, as appropriate, any other taxable income or loss reported separately on a schedule for line 15. Be sure to add the amount of state and local government bond interest taxable by Wisconsin.
Once you have completed Form 3, you should prepare a Wisconsin Schedule 3K-1, Partner's Share of Income, Deductions, Credits, etc., for each partner, except in the following situations:
If the partnership operates only in Wisconsin, you were not required to prepare a "Wisconsin version" of Form 1065-B, and the partnership has no credits, indicate on the partner's federal Schedule K-1 that there are no Wisconsin adjustments or credits.
If the partnership operates in and outside Wisconsin, you were not required to prepare a "Wisconsin version" of Form 1065-B, the partnership has no credits, and the partner is a full-year Wisconsin resident, indicate on the partner's federal Schedule K-1 that there are no Wisconsin adjustments or credits.
When completing the Wisconsin Schedule 3K-1, leave lines 1 through 14 and 16 through 19 blank. Instead, on line 20, for the items included on federal Schedule K-1 (Form 1065-B), Partner's Share of Income (Loss) From an Electing Large Partnership, in boxes 1, 2, 3, 4a, 4b, 5, 6, and 9, list the federal amount, adjustment, amount under Wisconsin law, and, for nonresidents and part-year residents, the Wisconsin source amount.
What types of permits do I need if I am starting a new business in Wisconsin, and should I be aware of special taxes for partnerships?
Certain partnerships doing business in Wisconsin are required to be registered with the Department of Financial Institutions (DFI). For more information, you may visit the
DFI website or call (608) 261-7577.
Sales, use, and withholding taxes are common taxes for businesses which require a permit from the Department of Revenue. To obtain more information about these business taxes, you may contact any
Department of Revenue office, call (608) 266-2776, or email us at
If a partnership has a nonresident partner, the partnership must pay a withholding tax on the income allocable to the nonresident partner. The withholding is paid on an annual basis, and is reported on
Form PW-1. For more information, see the
common questions for pass-through entity withholding.
If you have questions about what other permits you may need for your business, or you need assistance in obtaining a permit, call the Economic Development Corporation Permit Information Center at (800) 940-7232.
If I close my business, should I notify the Wisconsin Department of Revenue?
If a partnership terminated during the taxable year, check the appropriate box on the front of Form 3. Generally, the final return is due on or before the federal due date. If you hold sales, use, or withholding tax permits, contact the Department of Revenue at (608) 266-2776 or email us at
What records should I keep for Wisconsin tax purposes, and how long should I keep them?
You must keep accurate records to verify items of income, deductions, and credits claimed on your partnership return. Following is a listing of some of the tax records you should maintain:
Income: Keep sales journals, sales invoices, cash register tapes, financial statements, bank statements, contracts, and other documents to verify the income reported on your returns.
Deductions: Keep purchase journals, purchase invoices, check registers, canceled checks, bank statements, and other documents to verify expenses claimed on your returns.
Apportionment Percentages and Credits: Keep all supporting workpapers and other documents used in computing the apportionment percentages and credits claimed on your returns.
Generally, you must keep your tax records at least until the statute of limitations expires for the tax return, or each partner's tax return, on which any of those items of income, deductions, apportionment percentages, or credits appear. Usually this is 4 years from the due date of the return or the date filed, whichever is later.
You should keep records relating to property you own as long as they are needed to figure the basis of the original or replacement property and for 4 years after a partnership return, or each partner's tax return, is filed on which any sales or other dispositions of the property are reported.
You should keep copies of your tax returns indefinitely.
FOR MORE INFORMATION PLEASE CONTACT:
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949, MS 5-77
Madison, WI 53708-8949
Phone: (608) 266-2772
Fax: (608) 267-1030
Email additional questions to DORIncome@wisconsin.gov