This article focuses solely on the entry of the Credit and Foreign Transaction items which are found on Boxes 13 and 14 of the Schedule K-1 (Form 1120-S) Shareholder's Share of Income, Deductions, Credits, etc. For additional information regarding the requirements for Schedule K-1 (Form 1120-S), see: Shareholder's Instructions for Schedule K-1 (Form 1120-S).
To enter the Credit and Foreign Transactions items from a K-1 (Form 1120-S) in the tax program from the Main Menu of the Tax Return (Form 1040) select:
- Income Menu
- Rents, Royalties, Entities (Sch E, K-1, 4835, 8582)
- K-1 Input and select New and double-click on Form 1120-S K-1 S Corporation which will take you to the K-1 Heading Information Entry Menu. If the initial K-1 entry was previously keyed in, double click on the entry in the K-1 pick list.
After entering all of the information required on the K-1 Heading Information screen, select OK. The 1120-S Edit Screen has two distinct sections entitled Heading Information and Income, Deductions, Credits, and Other Items.
The K-1 1120-S Edit Screen in TaxSlayer Pro has an entry for each box on found on the Schedule K-1 (Form 1120-S) that the taxpayer received. A description of the Credit items contained in Box 13, including each of the Codes that can be entered in Box 13 are found below. The amounts shown in Box 13 reflect the taxpayer's share of credits from the corporation. These amounts do not take into consideration the following limitations. The adjusted basis of the shareholder's interest in the corporation; the amount for which the taxpayer is at risk; or the passive activity limitations. See: Publication 925 - Passive Activity and At-Risk Rules. It should be noted that none of these credits will automatically carry (except for Backup Withholdings which is reported in Box 13 with a Code O) from this menu to any schedule or form on the 1040. The amounts found in Box 13, (other than Backup Withholdings) will have to be entered on the appropriate form in other sections of TaxSlayer Pro.
CREDITS
Line 13A
- 2023 and Forward - Zero-emission nuclear power production credit - Amounts reported in Box 13, Code A represent the allowable zero-emission nuclear power production credit. Report this amount in Part II of Form 7213, Nuclear Power Production Credit, or Form 3800, Part III, line 1u.
- 2020 and Prior - Low Income Housing Credit (section 42(j)(5)) pre-2008 -Amounts reported in Box 13, Code A represent an allowable low income housing credit which is reported on line 4 of Form 8586 or line 1d of Form 3800. Form 8586 or Form 3800 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form 8586, Part I - Building Placed in Service Before 01/01/2008, Credit from Pass Through Entities Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 8586.
Line 13B
- 2023 and Forward - Production from advanced nuclear power facilities credit - Amounts reported in Box 13, Code B represent the allowable credit for production from advanced nuclear power facilities. Report this amount in Part I of Form 7213, or Form 3800, Part III, line 1cc.
- 2008 and prior Low Income Housing Credit (other) - Amounts reported in Box 13, Code B represent an allowable low income housing credit which is reported on line 4 of Form 8586 or line 1d of Form 3800. Form 8586 or Form 3800 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form 8586, Part I - Buildings Placed in Service Before 01/01/2008, Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 8586.
Line 13C - Low Income Housing Credit (section 42(j)(5)) post-2007 - Amounts reported in Box 13, Code C represent an allowable low income housing credit which is reported on line 11 of Form 8586 or line 4d of Form 3800. Form 8586 or Form 3800 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form 8586, Part II - Buildings Placed in Service After 12/31/2007, Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 8586.
Line 13D - Low Income Housing Credit (other) post-2007 - Amounts reported in Box 13, Code D represent an allowable low income housing credit which is reported on line 11 of Form 8586 or line 4d of Form 3800. Form 8586 or Form 3800 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form 8586, Part II - Buildings Placed in Service After 12/31/2007, Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 8586.
Line 13E - Qualified rehabilitation expenditures (rental real estate) - Amounts reported in Box 13, Code E represent a taxpayer's share of the qualified rehabilitation expenditures and other information the taxpayer needs to complete Form 3468 related to rental real estate activities using Code E. The taxpayer's share of qualified rehabilitation expenditures from property not related to rental real estate activities will be reported in Box 17, Code C. See: Instructions for Form 3468. If the corporation is reporting expenditures from more than one activity, the attached statement will separately identify the expenditure. Form 3468 can be accessed from the Main Menu of TaxSlayer Pro by selecting, Credits Menu, General Business Credit (3800), Current Year Business Credits, Form 3468.
Line 13F - Other rental real estate credits - Amounts reported in Box 13, Code F will be identified by the corporation as to the type of credit and any other information the taxpayer may need to determine these rental real estate credits.
Line 13G - Other rental credits - Amounts reported in Box 13, Code G will be identified by the corporation as to the type of credit and any other information the taxpayer may need to determine these rental credits.
Line 13H - Undistributed Capital Gains Credit - Amounts reported in Box 13, Code H represent taxes paid on undistributed capital gains by a regulated investment company. Report these taxes on Form 2439 which will flow to Line 73 of Form 1040. Form 2439 can be accessed from the Main Menu of TaxSlayer Pro by selecting, Payments, Estimates, EIC, Shareholders LT Gain. See: Instructions for Form 2439.
Line 13I - Biofuel producer credit - Amounts reported in Box 13, Code I represent a Biofuel Producer Credit which is reported on Form 6478. Form 6478 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form (6478), Biofuel Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 6478.
Line 13J - Work opportunity credit - Amounts reported in Box 13 Code J represent a Work Opportunity Credit which is reported on Form 5884. Form 5884 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form (5884), Work Opportunity Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 5884.
Line 13K - Disabled access credit - Amounts reported in Box 13, Code K represent a Disabled Access Credit which is reported on Form 8826. Form 8826 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form (8826), Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See. Instructions for Form 8826.
Line 13L - Empowerment Zone Community Credit - Amounts reported in Box 13, Code L represent an Empowerment Zone Employment Credit which is reported on Form 8844. Form 8844 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits, General Business Credit (3800), Current Year Business Credits, Form (8844), Form 8844 Credit from Pass Through Entities, Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 8844.
Line 13M - Credit for increasing research activities - Amounts reported in Box 13, Code M represent a Credit for increasing research activities which is reported on Form 6765. Form 6765 can be accessed from the Main Menu of TaxSlayer Pro by selecting, Credits Menu, General Business Credit (3800), Current Year Business Credits, Form (6765), Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See: Instructions for Form 6765.
Line 13N - Credit for employer social security & Medicare taxes - Amounts reported in Box 13, Code N represent a Credit for Employer Social Security & Medicare Taxes Paid on Certain Employees which is reported on Form 8846. Form 8846 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, Form 8846, Form 8846 Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type. See Instructions for Form 8846.
Line 13O - Backup Withholdings - Amounts reported in Box 13, Code O represent a taxpayer's share of the credit for backup withholdings on dividends, interest income, and other types of income. This amount is automatically pulls to Form 1040, Line 64 and a statement will be submitted with the return that identifies the corporation's name, address, EIN and the backup withholding amount.
Line 13P - Qualifying Advanced Coal Project Credit or Qualifying Gasification Project Credit - Amounts reported in Box 13, Code P represent the unused investment credit from the qualifying advanced coal project credit or qualifying gasification project credit allocated from cooperatives. Report this amount on Form 3468, Part II, line 6.
Line 13Q - Qualifying Advanced Energy Project credit - Amounts reported in Box 13, Code Q represent the unused investment credit from the qualifying advanced energy project credit allocated from
cooperatives. Report this amount on Form 3468, Part III, line 2.
Line 13R- Advanced Manufacturing Investment Credit - Amounts reported in Box 13, Code R represent the unused investment credit from the advanced manufacturing investment credit allocated
from cooperatives. Report this amount on Form 3468, Part IV, line 2.
Line 13T - Energy Credit - Amounts reported in Box 13, Code T represent the unused investment credit from the energy credit allocated from cooperatives. Report this amount on Form 3468, Part VI, line 31.
Line 13U - Rehabilitation Credit - Amounts reported in Box 13, Code T represent the unused investment credit from the rehabilitation credit allocated from cooperatives. Report this amount on Form 3468, Part VII, line 2.
Line 13V - Advanced Manufacturing Production Credit - Amounts reported in Box 13, Code V represent the the amount of allocable Advanced Manufacturing Production Credit. Report this amount on Form 7207, Advanced Manufacturing Production Credit, or Form 3800, Part III, line 1b.
Line13Y - Clean Hydrogen Production Credit - Amounts reported in Box 13, Code Y represent the Clean Hydrogen Production credit allocable to the taxpayer. Report this amount on Form 7210, Clean Hydrogen Production Credit, or Form 3800, Part III, line 1g.
Line 13Z - Orphan Drug Credit - Amounts reported in Box 13, Code Z represent the amounts of the Orphan Drug Credit allocable to the taxpayer. Report this amount on Form 8820, Orphan Drug Credit, or Form 3800, Part III, line 1h.
Line 13AA - Enhanced Oil Recovery Credit - Amounts reported in Box 13, Code AA represent the amounts of the Enhanced Oil Recovery Credit allocable to the taxpayer. Report this amount on Form 8830, Enhanced Oil Recovery Credit, or Form 3800, Part III, line 1t.
Line 13AB - Renewable Electricity Production Credit - Amounts reported in Box 13, Code AB represent the amounts of the Renewable electricity production credit allocable to the taxpayer. The corporation will provide a statement showing the allocation of the credit for production during the 4-year period beginning on the date the facility was placed in service and for production after that period. Report this amount on Form 8835, Renewable Electricity Production Credit, or Form 3800, Part III, line 1f (see TIP, earlier).
Line 13AC - Biodiesel, Renewable Diesel, or Sustainable Aviation Fuels Credit - Amounts reported in Box 13, Code AC represent the amounts of the Biodiesel, renewable diesel, or sustainable aviation fuels credit allocable to the taxpayer. If this credit includes the small agri-biodiesel producer credit or the sustainable aviation fuels credit, the corporation will provide additional information on an attached statement. If no statement is attached, report this amount on Form 8864, line 10. If a statement is attached, see the instructions for Form 8864, line 10.
Line 13AD - New Markets Credit - Amounts reported in Box 13, Code AD represent the amounts of the New markets credit allocable to the taxpayer. Report this amount on Form 8874, New Markets Credit, or Form 3800, Part III, line 1i.
Line 13AE - Credit for Small Employer Pension Plan Startup Costs - Amounts reported in Box 13, Code AE represent the amounts of the Credit for small employer pension plan startup costs allocable to the taxpayer. Report this amount on Form 8881, Credit for Small Employer Pension Plan Startup Costs, Auto-Enrollment, and Military Spouse Retirement Plan, Part I, or Form 3800, Part III, line 1j.
Line 13AF - Credit for Small Employer Auto-Enrollment - Amounts reported in Box 13, Code AF represent the amounts of the Credit for small employer auto-enrollment allocable to the taxpayer. Report this amount on Form 8881, Part II, or Form 3800, Part III, line 1dd.
Line 13AG - Credit for Military Spouse Participation - Amounts reported in Box 13, Code AG represent the amounts of the Credit for military spouse participation allocable to the taxpayer. Report this amount on Form 8881, Part III, or Form 3800, Part III, line 1ee.
Line 13AH - Credit for Employer-Provided Childcare Facilities and Services - Amounts reported in Box 13, Code AH represent the amounts of the Credit for employer-provided childcare facilities and services allocable to the taxpayer. Report this amount on Form 8882 or Form 3800, Part III, line 1k.
Line 13AI - Low Sulfur Diesel Fuel Production Credit - Amounts reported in Box 13, Code AB represent the amounts of the Low sulfur diesel fuel production credit allocable to the taxpayer. Report this amount on Form 8896, Low Sulfur Diesel Fuel Production Credit, or Form 3800, Part III, line 1m.
Line 13AJ - Qualified Railroad Track Maintenance Credit - Amounts reported in Box 13, Code AJ represent the amounts of the Qualified railroad track maintenance credit allocable to the taxpayer. Report this amount on Form 8900, Qualified Railroad Track Maintenance Credit, or Form 3800, Part III, line 4g.
Line 13AK - Credit for oil and gas production from marginal wells - Amounts reported in Box 13, Code AK represent the amounts of the Credit for oil and gas production from marginal wells allocable to the taxpayer. Report this amount on Form 8904, Credit for Oil and Gas Production From Marginal Wells, or Form 3800, Part III, line 1bb.
Line 13AL. - Distilled spirits credit - Amounts reported in Box 13, Code AL represent the amounts of the Distilled spirits credit allocable to the taxpayer. Report this amount on Form 8906, Distilled Spirits Credit, or Form 3800, Part III, line 1n (see TIP, earlier).
Line 13AM - Energy Efficient home Credit - Amounts reported in Box 13, Code AM represent the amounts of the Energy efficient home credit allocable to the taxpayer. Report this amount on Form 8908, Energy Efficient Home Credit, or Form 3800, Part III, line 1p.
Line 13AN - Alternative motor vehicle credit - Amounts reported in Box 13, Code AN represent the amounts of the Alternative motor vehicle credit allocable to the taxpayer. Report this amount on Form 8910, Alternative Motor Vehicle Credit, or Form 3800, Part III, line 1r.
Line 13AO - Alternative Fuel Vehicle Refueling Property Credit - Amounts reported in Box 13, Code AO represent the amounts of the Alternative fuel vehicle refueling property credit allocable to the taxpayer. Report this amount on Form 8911, Alternative Fuel Vehicle Refueling Property Credit, Part II, or Form 3800, Part III, line 1s.
Line 13AP - Clean Renewable Energy Bond Credit - Amounts reported in Box 13, Code AP represent the amounts of the Clean renewable energy bond credit allocable to the taxpayer. Report this amount on Form 8912, Credit to Holders of Tax Credit Bonds.
Line 13AQ - New Clean Renewable Energy Bond Credit - Amounts reported in Box 13, Code AQ represent the amounts of the New clean renewable energy bond credit allocable to the taxpayer. Report this amount on Form 8912.
Line 13AR - Qualified Energy Conservation Bond Credit - Amounts reported in Box 13, Code AR represent the amounts of the Qualified energy conservation bond credit allocable to the taxpayer. Report this amount on Form 8912.
Line 13AS - Qualified Zone Academy Bond Credit - Amounts reported in Box 13, Code AS represent the amounts of the Qualified zone academy bond credit allocable to the taxpayer. Report this amount on Form 8912.
Line 13AT - Qualified School Construction Bond Credit - Amounts reported in Box 13, Code AT represent the amounts of the Qualified school construction bond credit allocable to the taxpayer. Report this amount on Form 8912.
Line 13AU - Build America bond credit - Amounts reported in Box 13, Code AU represent the amounts of the Build America bond credit allocable to the taxpayer. Report this amount on Form 8912.
Line 13AV - Credit for Employer Differential Wage Payments - Amounts reported in Box 13, Code AV represent the amounts of the Credit for employer differential wage payments allocable to the taxpayer. Report this amount on Form 8932, Credit for Employer Differential Wage Payments, or Form 3800, Part
III, line 1w.
Line 13AW - Carbon Oxide Sequestration Credit - Amounts reported in Box 13, Code AW represent the amounts of the Carbon oxide sequestration credit allocable to the taxpayer. Report this amount on Form 8933, Carbon Oxide Sequestration Credit, or Form 3800, Part III, line 1x.
Line13AX - Carbon oxide sequestration credit recapture - Amounts reported in Box 13, Code AX represent the amounts of the Renewable electricity production credit allocable to the taxpayer. The corporation will provide any information needed to figure the recapture tax. Report the carbon oxide sequestration credit recapture amount on Form 8933, Part III, Section D, line 22.
Line 13AY - New clean vehicle credit - Amounts reported in Box 13, Code AY represent the amounts of the New clean vehicle credit allocable to the taxpayer. Report this amount on Form 8936, Clean Vehicle Credits, Part II, or Form 3800, Part III, line 1y.
Line 13AZ - Qualified commercial clean vehicle credit - Amounts reported in Box 13, Code AZ represent the amounts of the Qualified commercial clean vehicle credit allocable to the taxpayer. Report this amount on Form 8936, Part V, or Form 3800, Part III, line 1aa.
Line 13BA - Credit for Small Employer Health Insurance Premium - Amounts reported in Box 13, Code BA represent the amounts of the Credit for small employer health insurance premium allocable to the taxpayer. Report this amount on Form 8941, Credit for Small Employer Health Insurance Premiums, or Form 3800, Part III, line 4h .
Line 13BB - Employer Credit for Paid Family and Medical Leave - Amounts reported in Box 13, Code BB represent the amounts of the Employer credit for paid family and medical leave allocable to the taxpayer. Report in Form 8994, Employer Credit for Paid Family and Medical Leave, or Form 3800, Part III, line 4j.
Line 13BC - Eligible Credits from Transferor(s) Under Section 6418 - Amounts reported in Box 13, Code BC represent the amounts of the Eligible Credits from Transferor(s) Under Section 6418 allocable to the taxpayer. On a statement attached to Schedule K-1, the corporation will identify the type of transferred credits and any other information the taxpayer needs to file their tax return. Report this amount on Form 3800. See the Instructions for Form 3800, Parts III and V, for additional information.
Line 13ZZ - Other Credits - Amounts reported in Box 13, Code ZZ will be identified by the corporation as to the type of credit and any other information the taxpayer may need to determine the treatment of these credits. Generally, you are not required to complete the source credit form if the taxpayer is an individual and their only source for a credit listed in Form 3800, Part III, is from a partnership, S corporation, estate, trust, or cooperative.
Accordingly, many of the credits identified by the corporation in Box 13, Code P are reported directly on Form 3800, Part III. Typically these credits can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, General Business Credit (3800), Current Year Business Credits, select the applicable source credit, Credit from Pass Through Entities. Select NEW and enter the EIN, Name, Amount and K-1 3800 Type for the credit. However, the specific instructions for the credit and the Shareholder's Instructions for Schedule K-1 (Form 1120-S) should be reviewed.
FOREIGN TRANSACTIONS
Lines 14A through Line 14Q and any attached Statements to Box 16 - The K-1 1120-S Edit Screen in TaxSlayer Pro has an entry for each of the Codes that can be entered in Box 16; however none of these amounts will automatically carry to Form 1116. Instead, this information should be used by the taxpayer to determine if they can claim a Foreign Tax Credit. Form 1116 can be accessed from the Main Menu of TaxSlayer Pro by selecting Credits Menu, Foreign Tax Credit (1116). See: Instructions for Form 1116; and Publication 514 - Foreign Tax Credit for Individuals.
Note: This is a guide on entering the Credit items and Foreign Transactions items from Schedule K-1 (Form 1065) into the tax program. This is not intended as tax advice.
Additional Resources:
IRS: Shareholders Instructions for Schedule K-1 (Form 1120-S)
Schedule K-1 (Form 1120-S) - Heading Information
Schedule K-1 (Form 1120-S) - Income (Loss) Items
Schedule K-1 (Form 1120-S) - Deductions
Schedule K-1 (Form 1120-S) - Alternative Minimum Tax (AMT) Items
Schedule K-1 (Form 1120-S) - Items Affecting Shareholders Basis