1041-US: Allocating federal tax withheld to beneficiaries (FAQ)

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The IRS MeF system is now processing returns, and the filing deadline has been extended to 11:59 PM on Wednesday, April 18, 2018. For the latest details, see UltraTax CS alerts and notices.

Question

How do I allocate federal tax withheld to the beneficiary?

Answer

Per the form instructions, only backup withholding may be allocated to beneficiaries on Schedule K-1, line 13, box B. After the federal withholding has been entered on Screen Income, 1099M, 1099R, W2, W2G, PayExt, or K1-3, identify the portion that is section 3406 backup withholding in the first section on Screen Allocate in the Allocation folder. This portion is allocated to the beneficiaries based on the allocation method indicated (equal or percentage) and will be reported on their Schedule K-1 (Form 1041).

Related topic: 1041-US: Beneficiary allocations FAQs

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