Form 8804 is the annual return a partnership uses to report and pay the Section 1446 withholding tax on effectively connected taxable income (ECTI) allocated to its foreign partners. These instructions for Form 8804 cover who has to file, when the return is due, how to calculate the tax, how it interacts with the quarterly Form 8813 installments and the per-partner Form 8805 statements, and what happens when any of it is late.1Internal Revenue Service. About Form 8804, Annual Return for Partnership Withholding Tax (Section 1446)
Who Has to File
Any partnership that allocates ECTI to one or more foreign partners during the tax year must file Form 8804. ECTI is the partnership’s gross income connected with a U.S. trade or business, minus the deductions tied to that income. A foreign partner is a nonresident alien individual, a foreign corporation, a foreign estate, or a foreign trust.2Internal Revenue Service. Who Must Withhold
The filing requirement is triggered by the allocation, not by the balance due. A partnership that allocated ECTI to a foreign partner still has to file even if no tax ends up owed at year-end.
One boundary worth flagging: publicly traded partnerships follow a separate regime under Section 1446 and generally report their withholding on Form 1042 instead of Form 8804.3GovInfo. 26 USC 1446 – Withholding Tax on Foreign Partners Share of Effectively Connected Income
When Form 8804 Is Due
Form 8804, along with every attached Form 8805, is due by the 15th day of the 3rd month after the partnership’s tax year closes. For a calendar-year partnership, that date is March 15.4Internal Revenue Service. Instructions for Forms 8804, 8805, and 8813
Partnerships that keep their books and records outside the United States and Puerto Rico get more time. Their deadline is the 15th day of the 6th month after year-end, which is June 15 for a calendar-year filer. Check the box at the top of Form 8804 to claim this later date.
Need more time? File Form 7004 for an automatic six-month extension.5Internal Revenue Service. About Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns The catch is the one that catches most partnerships: an extension to file is not an extension to pay. Any balance owed must be paid by the original due date, or late-payment penalties and interest start running.
How the Withholding Tax Is Calculated
The partnership figures each foreign partner’s distributive share of ECTI under Section 704, then applies the withholding rate that matches how the partner is classified:
- 21% on ECTI allocable to a corporate foreign partner.
- 37% on ECTI allocable to a non-corporate foreign partner, which covers nonresident alien individuals, foreign estates, and foreign trusts.
Those are the rates for tax year 2026.2Internal Revenue Service. Who Must Withhold
Reducing Withholding With Form 8804-C
A foreign partner who expects partner-level deductions or losses to offset some of their ECTI can give the partnership a Form 8804-C. A valid certificate lets the partnership lower the installment payments it sends to the IRS during the year.6Internal Revenue Service. Form 8804-C, Certificate of Partner-Level Items to Reduce Section 1446 Withholding
Some things a partner cannot do on the certificate: certify charitable contribution deductions, use deductions the IRS has already disallowed, or certify losses for a tax year ending on or after the partnership’s tax year ends. A certified net operating loss is capped at 90% of the partner’s allocable ECTI after all other certified deductions and any state and local income taxes the partnership withholds.
Each foreign partner files a separate certificate, and a new one is required each tax year. The partner sends it to the partnership, not the IRS; the partnership then submits the certificate with its Form 8804. Filing a certificate does not relieve the foreign partner of the obligation to file a U.S. income tax return or to make estimated tax payments of their own.
Working Through the Three Parts of Form 8804
Form 8804 breaks into three parts.4Internal Revenue Service. Instructions for Forms 8804, 8805, and 8813
Part I is identification: the partnership’s legal name, address, EIN, and the tax year covered. Check the foreign-books box here if it applies.
Part II is the tax calculation. Enter total ECTI allocable to foreign partners, split between the corporate and non-corporate shares, apply 21% and 37%, and total the annual Section 1446 liability. This section also totals the year’s installment payments made with Form 8813.
Part III reconciles. Subtract total payments from total liability. A positive figure is tax due with the return; a negative one is an overpayment the partnership can claim as a credit or refund.
Preparing Form 8805 for Each Foreign Partner
Form 8805 is the per-partner information statement reporting each foreign partner’s ECTI allocation and the Section 1446 tax withheld on their behalf. Prepare one Form 8805 for every foreign partner allocated ECTI, even if no tax was actually paid for that partner.4Internal Revenue Service. Instructions for Forms 8804, 8805, and 8813
Copy A of each Form 8805 is attached to the Form 8804 filed with the IRS. A copy also goes to the foreign partner by the return’s due date, so the partner can attach it to their own U.S. return (Form 1040-NR for individuals, Form 1120-F for corporations) and claim the withholding as a credit.7Internal Revenue Service. About Form 8805, Foreign Partners Information Statement of Section 1446 Withholding Tax
Quarterly Installments With Form 8813
The Section 1446 tax is paid in installments during the year, not just at filing. Installments are due on the 15th day of the 4th, 6th, 9th, and 12th months of the partnership’s tax year. For calendar-year partnerships, that’s April 15, June 15, September 15, and December 15.8eCFR. 26 CFR 1.1446-3 – Time and Manner of Calculating and Paying Over the 1446 Tax Each installment is submitted with Form 8813, the Partnership Withholding Tax Payment Voucher.9Internal Revenue Service. About Form 8813, Partnership Withholding Tax Payment Voucher
If installments fall short, an underpayment penalty is calculated on Schedule A (Form 8804). No underpayment penalty applies when the year’s total Section 1446 tax is under $500. Partnerships whose income swings during the year can use the annualized income installment method or a prior-year safe harbor to reduce the penalty. In most cases the IRS calculates the penalty and bills the partnership, so Schedule A itself doesn’t have to be filed; partnerships that prefer to compute the penalty themselves can attach Schedule A and enter the amount on line 8 of Form 8804.10Internal Revenue Service. 2025 Schedule A (Form 8804)
Where to Pay and Where to Mail
The partnership can pay any balance electronically through the Electronic Federal Tax Payment System (EFTPS) or by mailing a check or money order in U.S. currency with the return. EFTPS is also the normal method for quarterly installments.
The paper return, with Copy A of every Form 8805 attached, goes to:
Internal Revenue Service Center
P.O. Box 409101
Ogden, UT 844094Internal Revenue Service. Instructions for Forms 8804, 8805, and 8813
Confirm the mailing address in the current year’s instructions before sending, because IRS service center assignments can change.
Penalties and Interest
Three separate penalties can apply if a partnership mishandles its Section 1446 obligations.
The late-payment penalty runs at 0.5% of the unpaid tax for each month or partial month the balance is outstanding, capped at 25%.
Information return penalties hit each late or incorrect Form 8805. For returns due in 2026, the penalty is $60 per form if corrected within 30 days, $130 if corrected between 31 days and August 1, and $340 per form after August 1 or if never filed. Intentional disregard raises the penalty to $680 per form with no cap.11Internal Revenue Service. 20.1.7 Information Return Penalties
The estimated tax underpayment penalty on Schedule A is essentially interest on any installment shortfall, computed daily at the IRS underpayment rate.
Interest itself compounds daily on unpaid tax, penalties, and previously accrued interest until the balance is paid in full. The underpayment rate is 7% for the first quarter of 2026 and 6% for the second quarter.12Internal Revenue Service. Quarterly Interest Rates Rates reset every calendar quarter, so any partnership carrying a balance into later months should check the current figure before estimating what’s owed.