Illinois Schedule K-1-P – Partner’s or Shareholder’s Share of Income (2026)
Last reviewed: 2025-11-07
Use the Illinois Tax Form Calculator Schedule K-1-P: Partner’s or Shareholder’s Share of Income as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Illinois state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.
Schedule K-1-P reports a partner’s or shareholder’s share of Illinois-source income, deductions, credits, and tax withheld from a partnership or S corporation that does business in Illinois. It provides the detail needed to reconcile pass-through income with Form IL-1040 or Form IL-1041. The issuing entity also files Schedule K-1-P(1) with the Illinois Department of Revenue to match withholding data electronically.
When to Use Schedule K-1-P
You must attach a K-1-P to your Illinois return if you:
- Are a resident or nonresident partner or shareholder in an Illinois pass-through entity,
- Received an Illinois Schedule K-1-P from that entity showing income, loss, or withholding,
- Claim Illinois credits or payments made on your behalf by the entity.
The schedule ensures that your Illinois taxable income includes the correct pass-through share and prevents double taxation or loss of credits withheld at the entity level.
How to Complete Schedule K-1-P
- Enter your share of Illinois-source income as shown on the entity’s Schedule K-1-P(1) or Federal Schedule K-1.
- Enter Illinois tax withheld by the entity on your behalf (Line 2).
- Report any credits distributed to you by the entity (Line 3).
- Compute Illinois tax on your share of income using the flat rate of 4.95%, then apply withholding and credits to determine net tax or overpayment.
All partners and shareholders should retain a copy of their K-1-P with supporting statements for at least three years after filing.
| 1 | Partner’s or shareholder’s Illinois-source income | |
| 2 | Illinois income tax withheld by entity | |
| 3 | Credits distributed by entity (if any) | |
| 4 | Illinois tax on income (4.95%) × Line 1 | |
| 5 | Net tax due or (overpayment): Line 4 − (Lines 2 + 3) |
Examples of How Schedule K-1-P Works
Example 1 – Resident Partner: You are a 25% partner in an Illinois LLC that reported $100,000 of Illinois-source income. Your share is $25,000. Multiply by 4.95% = $1,237.50 Illinois tax. If the partnership already withheld $1,000, you owe $237.50 additional tax.
Example 2 – Nonresident Shareholder: A nonresident shareholder of an S corporation earns $20,000 Illinois income. The S corporation withholds $990 (4.95%). The shareholder may claim the $990 as credit against total Illinois liability on their nonresident return.
Importance of Schedule K-1-P
This schedule ensures transparency of pass-through taxation in Illinois. Partnerships and S corporations are not taxed directly at the entity level but “pass through” income to owners. Illinois withholding at the entity level ensures tax compliance by nonresidents while allowing residents to credit prepayments. Properly filing Schedule K-1-P guarantees that both taxpayers and entities avoid duplicate taxation and maintain accurate Illinois records.
Additional Considerations
- Attach a separate Schedule K-1-P for each entity in which you hold an interest.
- Ensure totals reconcile with Schedule CR if claiming credit for tax paid to other states.
- If your entity paid replacement tax or pass-through withholding, verify that those figures match the K-1-P you received.
Failing to include Schedule K-1-P can result in disallowance of your withholding or credits, causing refund delays or tax assessments. Always verify entity EINs and income allocations before filing.
Last reviewed: 2025-11-07: If you believe this form requires an update, please contact us.
Related Forms and Resources
- Form IL-1040 – Individual Income Tax Return
- Form IL-1041 – Fiduciary Income Tax Return
- Schedule CR – Credit for Tax Paid to Other States
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Frequently Asked Questions
Will IL tax my Roth conversions?
Conversions are taxable federally and typically flow to IL; IL retirement exclusion usually applies to distributions, not conversions—check IL guidance.
How do I amend my Illinois return?
File Form IL-1040-X after your original IL-1040 is processed; include revised schedules (e.g., Schedule ICR/CR/M) and explanations.
Why does Illinois distinguish pre-1969 and post-1969 gains?
Because Illinois enacted its income tax on August 1, 1969, any appreciation before that date occurred before the state had authority to tax income. Form IL-F preserves fairness by taxing only the gain realized since Illinois income tax law took effect. This approach avoids retroactive taxation while ensuring current gains are taxed appropriately.
When should Schedule FD be filed?
File Schedule FD with your annual IL-1040 return for the tax year in which the deferred income became federally taxable.
Why is Schedule M important for accurate Illinois taxes?
Illinois uses Schedule M to ensure fairness in applying its flat 4.95% tax rate. Because Illinois starts from federal AGI, this form ensures only Illinois-approved income is taxed and proper deductions are applied. It’s especially vital for retirees, military personnel, and taxpayers with multistate investments.
Important Notes
All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.