LLC filing requirements in PA

[3kd]

What is the name of your state? Pennsylvania

State Tax filing requirements for Real Estate LLC in PA

We have an LLC and own one single family house that generated no revenue in 2019. It needs repairs and two of four members in the LLC were out of commission for medical care. This is not a new business.

We are filing the federal tax forms with TurboTax. We don't know what requirements we have to file with Pennsylvania. We don't want to buy software from Turbotax to find out we don't need it.

Do we need to file anything with PA?

Thanks in advance.

 

[Taxing Matters]

Do we need to file anything with PA?

Thanks in advance.

You have a domestic LLC with four members. That is a partnership by default under federal tax law. A domestic partnership must file a Form 1065 with the IRS each year unless it both (1) has received no income AND (2) has incurred no expenses that would be deductions for federal income tax. See the instructions to Form 1065 under "who must file" on page 4. So, for example, if the LLC had depreciation to claim for 2019 it would still file a partnership return (Form 1065) even though it had no income for the year.

For Pennsylvania, a LLC treated as a partnership under the federal rules is also regarded as a partnership for state tax purposes, too. The rule for filing the Pennsylvania information return Form PA 20S/PA 65 if either of the following are true:

• During the taxable year, the partnership earned, received, or acquired any gross taxable income (loss) allocable or apportionable to Pennsylvania, regardless of the amount of its income (loss) and/or whether or not the income was distributed;
• The partnership, at year end, had at least one partner that was a Pennsylvania resident individual, estate, trust, or disregarded entity owned by a resident individual.

See the PA Department of Revenue page on Pass Through Entities. So if the property is located in PA and it has expenses then a return is required just like with the federal return. But with PA a return is also required if any partner is a PA resident even if a return otherwise would not be needed because there was no PA income or deductions.

Turbotax won't do partnership returns for you. Both the federal and state governments have extended the deadline for filing partnership returns to July 15. You need to either get the forms filed by then if you are required to file or file an extension by then. Note that penalties for failure to file these returns can get expensive and the penalty does not depend on tax due (because partnerships do not pay tax) unlike the penalties for your individual income tax return.

Partnership returns can get complex, particularly for those not familiar with partnership taxation concepts. So if you are not familiar with partnership taxation I strongly suggest you get advice from a tax professional who is experienced with them.

 

[davew9128]

Both the federal and state governments have extended the deadline for filing partnership returns to July 15.

Sorry, but calendar year end partnerships did not get an extension to 7/15.

 

[Taxing Matters]

Sorry, but calendar year end partnerships did not get an extension to 7/15.

You're correct, I should have made it more clear that the federal extension is for returns that would have otherwise been due on or after April 1.

 

[3kd]

Thank you both. Not the answer I hoped to hear, but it is clear now. We mailed a request for extension in before March 15.

 

[LdiJ]

Thank you both. Not the answer I hoped to hear, but it is clear now. We mailed a request for extension in before March 15.

Be aware that your extension is only good until September 15th for the partnership. You might want to go ahead and file extensions for the partner's personal returns as it would be easier to get a tax professional on board after July 15th. We are all getting pretty slammed right now.