If you missed the partnership tax deadline, the most important thing you can do is file your return as soon as possible. Waiting longer can allow any Form 1065 late filing penalties to keep growing, and the penalty for filing taxes late on a partnership return adds up fast, even when your business owes no income tax.
The IRS can assess a late filing penalty as long as a return was required, even if your domestic partnership had no income, reported a loss, or had little activity for the year. This applies to general partnerships, limited partnerships, limited liability companies taxed as partnerships, and multi-member LLCs that were required to file Form 1065, U.S. Return of Partnership Income.
Below, we cover what you need to know about the Form 1065 failure to file rules, the 2026 filing deadlines, and penalty relief that may be available.
At a glance:
- The Form 1065 due date for a calendar-year partnership filing its 2025 return was March 16, 2026.
- If you requested an automatic six-month extension by filing Form 7004, the extended deadline is Sept. 15, 2026.
- For returns due in 2026, the failure to file penalty is generally $255 per partner for each month or partial month the return is late (for up to 12 months).
- Separate penalties may apply if Schedule K-1 forms are late, incomplete, or incorrect.
- Some partnerships may qualify for Automatic Exemption from Penalty, reasonable cause relief, or small partnership penalty relief.
- Filing now can help prevent additional monthly penalties.
What happens if you forget to file a Form 1065?
If you forget to file Form 1065, the IRS may assess a failure to file penalty based on the number of partners in your business and how many months or partial months the return is late. The penalty can apply even if your partnership had no taxable income or did not owe federal income tax.
A late return can also delay the Schedule K-1 (Form 1065) information your partners need for their personal income tax returns. Depending on the amounts reported, those items may affect income tax, capital gains tax, or self-employment tax.
You may also receive IRS notices explaining the issue, including:
- CP162A notice: Your partnership return was late or not filed electronically as required.
- CP162B notice: Your partnership return was incomplete or not filed electronically as required.
Because Form 1065 is a required information return for a pass-through entity, filing as soon as possible can help limit additional penalties and get your partners the information they need.
When is Form 1065 due in 2026?
If you use a calendar tax year, your 2025 Form 1065 is due March 16, 2026, because the usual March 15 due date falls on a Sunday.
If you use a fiscal year, your partnership tax return is generally due on the 15th day of the third month after your tax year ends.
What is the Form 1065 extension deadline?
If you need more time to file, you can submit Form 7004 to request a business tax extension by the original 1065 filing deadline. This gives you an automatic six-month extension to file Form 1065, meaning the extended deadlines are:
- Calendar year Form 1065 extension deadline: Sept. 15
- Fiscal year Form 1065 extension deadline: six months after your original Form 1065 due date
You can e-file Form 7004, you just need to submit it by the regular due date of your partnership return.
Tax tip: An extension gives you more time to file, but it does not necessarily give you more time to pay any tax liability that may apply. Although partnerships generally pass income and losses through to their partners, keep in mind that certain entity-level taxes or payments can still apply in limited situations.
How the Form 1065 late filing penalty is calculated
Unlike the individual penalty for filing taxes late, which is partly based on unpaid tax, your Form 1065 late filing penalty depends on how many partners you had and how long the return was late.
The IRS uses this formula:
Monthly penalty ($255 in 2026) × number of partners × number of months or partial months late
For returns due in 2026, the penalty is $255 for each person who was a partner at any time during the tax year. Any part of a month late counts as a full month, and the penalty can continue for up to 12 months.
Here are a few examples (assuming the full penalty applies, and you do not receive penalty relief):
| Partners | Months late | Estimated penalty |
|---|---|---|
| 3 | 1 | $765 ($255 × 3 × 1) |
| 5 | 3 | $3,825 ($255 × 5 × 3) |
| 10 | 6 | $15,300 ($255 × 10 × 6) |
| 12 | 12 (max) | $36,720 ($255 × 12 × 12) |
The penalty may apply even if the partnership:
- Had no income
- Reported a loss
- Had no tax due
- Was inactive during part or all of the year
Tax tip: Interest may also accrue on any assessed penalty until it is paid in full, according to the IRS.
Additional Schedule K-1 penalties for partnerships
You may face a separate penalty if you do not provide each partner with a complete and accurate Schedule K-1 on time. Schedule K-1 (Form 1065) reports each partner’s share of partnership income, deductions, credits, guaranteed payments, capital gains, and other items. Your partners need this information to prepare their own returns.
For statements due in 2026, the IRS may charge $340 for each Schedule K-1 that is late, incomplete, or incorrect. Lower penalties may apply if you correct the issue within certain time frames.
That means you could face both:
- A Form 1065 failure to file penalty, and
- A separate penalty for each late or incorrect Schedule K-1
For example, if your business has five partners, you could face the partnership return penalty plus penalties for up to five K-1 forms, if applicable.
What to do if you missed the partnership tax deadline
If your partnership tax return is late, file it as soon as you reasonably can. You do not need to wait for an IRS notice before taking action.
Here are some practical next steps:
- Gather the partnership’s records. Collect income and expense records, bank statements, ownership information, prior-year returns, and any Schedule L balance sheet details you need.
- Confirm the partner information. Make sure names, addresses, tax identification numbers, ownership percentages, and profit-and-loss allocations are correct.
- Complete the required schedules. Prepare Schedule B, Schedule L, Schedule M-1, Schedule M-2, and a Schedule K-1 for each partner, as applicable.
- E-file when possible. Electronic filing can help reduce processing delays and data-entry errors. Some partnerships are actually required to e-file based on the number of returns they file. The IRS generally requires e-filing when a partnership files at least 10 returns of any type during the year, although exceptions and hardship waivers may apply.
- Provide K-1s to the partners. Partners may need their K-1 information to file or amend their personal returns.
- Review any IRS notices. If the partnership has already received a notice, respond by the date shown and follow the instructions for requesting penalty relief.
If you need assistance, TaxAct® Business can help you prepare and e-file Form 1065 and generate partner Schedule K-1 forms. We also offer a Form 1065 Tax Preparation Checklist to make sure you have everything you need before filing.
Can the Form 1065 late filing penalty be waived?
Possibly. Your partnership may qualify for penalty relief based on filing history, the tax year involved, or the reason the return was late. Let’s look at some common partnership penalty relief options.
Automatic Exemption from Penalty
Starting in summer 2026, the IRS is replacing First-Time Abatement for eligible returns with Automatic Exemption from Penalty (AEP).
AEP begins with eligible 2025 tax year returns and can apply to the Form 1065 failure to file penalty. To qualify, your partnership must have timely filed the same type of return for the previous three years and meet the other IRS requirements.
The IRS applies AEP automatically after processing the original late return, so you don’t need to request it. However, AEP does not remove unpaid tax, interest, or penalties that are not covered by the program.
If you receive a penalty notice but believe your partnership qualifies for AEP, you should contact the IRS using the information on the notice.
First-Time Abatement
First-Time Abatement (FTA), may still be available for eligible tax years or returns that are not considered for AEP. Unlike AEP, FTA is not automatic. Typically, you must contact the IRS and request relief based on your partnership’s prior filing and payment history.
Reasonable cause
If you do not qualify for AEP or FTA, you may still be able to request penalty relief for reasonable cause.
This generally means something outside your control made it difficult or impossible to file on time. Examples may include a serious illness, natural disaster, loss of important records, or the death or extended absence of a key person.
The IRS reviews each reasonable cause request individually. Be ready to explain what happened, how it affected your ability to file, and what you did to file once the issue was resolved. Supporting documents like hospital or court records, copies of letters, or disaster documentation may also help your case.
Small partnership relief under Rev. Proc. 84-35
If your partnership has 10 or fewer partners, you may qualify for reasonable cause relief under Rev. Proc. 84-35.
To qualify, you must meet these requirements:
- Your partnership had 10 or fewer partners (a married couple filing jointly counts as one partner).
- Each partner is an individual (other than a nonresident alien) or the estate of a deceased partner.
- Partnership income, deductions, and credits are divided among the partners using the same ownership percentages.
- Each partner reported their share of partnership items on a timely filed personal income tax return.
You may need to respond to your IRS notice and show that your partnership meets these requirements. This relief may not apply if you have a foreign partnership, partnerships with corporate or other entity partners, or situations where partners did not report their shares on time.
FAQs
The bottom line
If you missed the Form 1065 filing deadline, the best thing you can do is file your return and provide your partners’ K-1s as soon as possible. If the IRS assesses a penalty, review your notice carefully to see whether you qualify for AEP or another type of penalty relief.
Still need to file? TaxAct Business can help you prepare and e-file Form 1065, as well as create Schedule K-1 forms for your partners. Once the K-1s are ready, your partners can also use the information to complete their individual TaxAct returns.
This article is for informational purposes only and not legal or financial advice.
All TaxAct offers, products and services are subject to applicable terms and conditions.
Citations
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McKendrick, Erin. “What Is a Schedule K-1?: A Guide and Instructions on How to File.” TaxAct Blog, 30 Jan. 2026.
Ponder, Meghen. “5 Common IRS Notices Explained: CP14, CP2000, and More.” TaxAct Blog, 9 July 2026.
Internal Revenue Service. “Understanding Your CP162A Notice.” IRS, 27 June 2026.
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