West Virginia State - Schedule K-1
The West Virginia Schedule K-1 is a tax form used to report the share of income, deductions, credits, and other items allocated to a partner, shareholder, member, or beneficiary of a pass-through entity such as an S Corporation, Partnership, Limited Liability Company (LLC), or Fiduciary. This form is essential for individuals who have an ownership interest in such entities and are required to report their share of the entity’s taxable activity on their West Virginia individual income tax return.
Key Sections of the Schedule K-1
- Distributive Share of Income: Line 1 reports the pro rata share of income allocable to West Virginia. Additional income items include interest or dividends from federal obligations (Line 2) and state/local bonds (Line 3), which may be subject to state tax even if exempt from federal tax.
- Exempt Income Adjustments: Lines 4 and 7 address interest on borrowed funds for tax-exempt bonds and interest/dividends from U.S. federal obligations that are exempt from West Virginia state tax.
- Subtractions: Line 9 allows for deductions of income included in federal adjusted gross income but excluded from state taxable income.
- Credits Allocated to Owner: The form includes various tax credits allocable to the partner/shareholder/member, such as the Economic Opportunity Tax Credit (Line 11), High Technology Manufacturing Business Credit (Line 12), and Neighborhood Investment Program Credit (Line 14).
- Additional Credits: Other credits include Apprentice Training Tax Credit (Line 15), Historic Rehabilitated Buildings Tax Credit (Line 16), and Build WV Tax Credit (Line 30), among others.
Purpose and Use
The Schedule K-1 is used by pass-through entities to report the portion of income, deductions, and credits that are attributable to each owner. The information reported on this form is then transferred to the individual’s West Virginia Form 1040 or equivalent state return. It ensures accurate reporting of state taxable income and eligibility for various state-specific tax credits.
Important Notes
- Owners must report all items listed on the Schedule K-1, including income, deductions, and credits, on their individual West Virginia tax return.
- The form includes withholding information for S Corporations and partnerships, which may affect the taxpayer’s liability.
- Only income and credits allocable to West Virginia are reported; non-resident owners may have different reporting requirements.
Source:
Schedule K-1: Income, Loss, Modification, Credits, and Withholding
Disclaimer: Always verify information with official forms and instructions from the West Virginia Department of Revenue or the Internal Revenue Service. OLT (Online Taxes) provides guidance based on available resources but does not guarantee accuracy for individual circumstances.