How to Enter a K-1 in TaxAct: Boxes, Losses, and K-3

To enter a K-1 in TaxAct, open the Business Income section, pick the form type that matches the K-1 you received (Form 1065 for a partnership, Form 1120-S for an S corporation, or Form 1041 for an estate or trust), enter the entity’s EIN and legal name, and then work through the screens that mirror the boxes on the face of the form. The tricky part is not the numbered boxes; it’s the coded items in Box 20 (partnerships) or Box 17 (S corps), the supplemental statements behind them, and the follow-up screens for things like the Section 199A deduction and any losses.

What to Have in Front of You Before You Start

Pull the K-1 out and check that you have all of it. Every K-1 comes with three pieces of information you’ll need: the entity’s Employer Identification Number and legal name, the dollar amounts printed on the face of the form, and the supplemental statements that spell out the coded boxes. The supplemental pages are where the detail lives. If you enter only the face of the K-1, your return will be wrong.

Know which form you have. A partnership K-1 (Form 1065) and an S corporation K-1 (Form 1120-S) look similar but the box numbers don’t line up. Box 1 reports ordinary business income or loss on both. Box 2 covers net rental real estate income, which is generally passive for all partners.¹ Interest and dividends show up in Boxes 5 and 6a. Beyond those common lines, the two forms diverge, so match your entries to the form type.

Finding the K-1 Entry Screen in TaxAct

The path differs slightly by version. In the online version, click Income on the dashboard, open the Business & Self Employed dropdown, and click Add beside Partnership Income (Schedule K-1). In the classic or desktop versions, click Federal, open the Business Income dropdown, and select Partnership income (Form 1065 Schedule K-1).² S corporation and estate or trust K-1s follow the same Business Income menu; you select the matching form type instead.

Once you choose the form, TaxAct asks for the entity’s EIN and legal name. Type both exactly as they appear on the K-1. A mismatch with the entity’s return is something the IRS eventually flags.

Entering the Numbered Boxes

TaxAct walks you through screens that mirror the layout of the K-1 itself, one box at a time. Enter Box 1 ordinary income, Box 2 rental real estate, and so on down the form. Blank boxes stay blank. The sequential approach can feel slow when much of your K-1 is empty, but it keeps you from skipping a line.

Coded Boxes and Supplemental Statements

The coded boxes are the ones people miss. Box 20 on a partnership K-1 and Box 17 on an S corporation K-1 hold “Other Information” items, each identified by a code letter and a dollar amount that comes from a supplemental statement attached to the K-1.³ TaxAct gives you a field for the code and a field for the amount. Enter each pair exactly as the supplemental statement shows it.

Some codes open follow-up screens. Section 199A qualified business income information (Code Z on a partnership K-1, Code V on an S corp K-1) is the common one. TaxAct will ask for the entity’s W-2 wages paid and the unadjusted basis immediately after acquisition (UBIA) of qualified property, both of which come from the 199A statement, not from your own records.⁴ Enter the amounts as shown. One caveat: the Section 199A deduction was originally set to expire for tax years after December 31, 2025, so if you’re filing for 2026 or later, confirm the deduction still applies before relying on it.

If Your K-1 Reports a Loss

A loss on your K-1 doesn’t automatically become a deduction. Four IRS rules apply in a specific order: basis, at-risk, passive activity, and finally the excess business loss limit.⁵ TaxAct prompts you through each one, but you have to feed it the right inputs.

For basis, TaxAct opens a Basis Worksheet asking for your prior-year ending basis, contributions made during the year, your share of entity income, and distributions received. Losses beyond your current-year basis are suspended and carry forward. S corporation shareholders track two tiers — stock basis first, then debt basis for loans you personally made to the corporation — and losses reduce stock before touching debt.⁶

For at-risk, TaxAct asks whether any debt included in your basis is nonrecourse or guaranteed by someone else. Nonrecourse debt generally doesn’t increase your at-risk amount. Qualified nonrecourse financing on real property used in a real estate activity is the main exception and does count.⁵

For passive activity, TaxAct asks you to classify the activity. If you don’t materially participate, the software treats it as passive and generates Form 8582 to cap the deduction at your passive income from all sources.⁷ Answer these classification questions carefully; a wrong click here is one of the most common ways a self-prepared K-1 return goes off the rails.

Schedule K-3 Has Its Own Entry Section

If the entity has any meaningful international activity, you should receive a Schedule K-3 alongside your K-1. Foreign taxes paid or accrued show up in Box 21 on a partnership K-1 and in Box 16, Code F on an S corp K-1, but those single-line entries aren’t enough for the foreign tax credit calculation.¹ The S corporation K-1 instructions specifically direct shareholders to use Schedule K-3 rather than the Box 16 amount alone when completing Form 1116.³

TaxAct has a separate entry section for K-3 data that breaks down foreign source income by category.⁸ If you received a K-3 and skip it, your Form 1116 calculation will be incomplete.⁹

Multi-State Allocations

When the entity operates across state lines, the K-1 supplemental pages allocate income to each state. TaxAct doesn’t pull this from a numbered box; it uses the state-specific amounts to populate nonresident state returns when you have the corresponding state module active and linked to the K-1 entry.

A K-1 can put you on the hook to file in states you’ve never set foot in. Each state sets its own filing threshold for nonresident pass-through income, and some require a return for small amounts. Before assuming you can ignore an allocation, check the nonresident filing rules for each state that appears on your supplemental statement.

Check Self-Employment Tax on Partnership Income

General partners typically owe self-employment tax on their share of partnership income. Box 14, Code A on the partnership K-1 reports net earnings from self-employment, and TaxAct carries that amount to Schedule SE automatically once you enter it.¹ After you finish the K-1 entry, open Schedule SE and confirm the number matches what the K-1 reported. S corporation K-1s have no equivalent to Box 14, Code A because S corp pass-through income isn’t subject to self-employment tax.

If a Corrected K-1 Arrives After You File

K-1s often arrive late. Partnerships and S corporations aren’t required to send them until March 15, and many entities file their own extensions, which pushes K-1 delivery past the April deadline. If you don’t have your K-1 by your filing date, submit Form 4868 for an automatic six-month extension of your personal return. The extension covers filing, not payment; estimate the tax and pay by the original deadline using last year’s K-1 or your own records.

If you receive a corrected K-1 after filing, re-enter the corrected data in TaxAct so it recalculates your return, then file Form 1040-X to amend.¹⁰ Any state returns affected by the corrected numbers need separate amendments. The sooner you file, the less interest accrues on any additional tax owed.

1
Internal Revenue Service. Partner’s Instructions for Schedule K-1 (Form 1065) (2025)
2
TaxAct. Schedule K-1 (Form 1065) – Entering in Program
3
Internal Revenue Service. Shareholder’s Instructions for Schedule K-1 (Form 1120-S) (2025)
4
Internal Revenue Service. Qualified Business Income Deduction
5
Internal Revenue Service. Publication 925 (2025), Passive Activity and At-Risk Rules
6
Internal Revenue Service. S Corporation Stock and Debt Basis
7
Internal Revenue Service. 2025 Instructions for Form 8582
8
Internal Revenue Service. Partnership Instructions for Schedules K-2 and K-3 (Form 1065) (2025)
9
Internal Revenue Service. Foreign Tax Credit
10
Internal Revenue Service. Instructions for Form 1040-X (Rev. December 2025)