1. ​What is the purpose of the election?
   
   
2. How does a partnership make the election?
   
   
3. When must the election be made?
   
   
4. How does an electing partnership receive an extension of time for filing the Wisconsin Form 3 return if the partnership is not requesting a federal extension?
   
   
5. Can a partnership file an amended return to claim the election to pay tax at the entity level if the partnership already filed a Wisconsin Form 3 return without making the election?
   
   
6. Can the election be revoked?
   
   
7. How does the electing partnership notify the partners that the election has been made?
   
   
8. When making the election, will there be any signatures required to show consent of the partners?
   
   
9. Can a partnership with a short tax year make the election?
   
   

1. What is the purpose of the election?

   To allow a partnership or limited liability company treated as a partnership to pay tax on items that would otherwise be reported by the partners. For any year in which an election is made, partners do not include in their Wisconsin adjusted gross income their proportionate share of all items of income, gain, loss, or deduction of the partnership.

2. How does a partnership make the election?

   The partnership must check Box I in the return information section of 2024 Form 3, Wisconsin Partnership Return. The partnership must have consent from partners who hold an aggregate of more than 50 percent of the capital and profits of a partnership on the day of the election, according to sec. 71.21(6)(a), Wis. Stats.

3. When must the election be made?

   The election must be made annually on or before the extended due date of the Wisconsin Form 3. The election is made on the day the Form 3 is filed.

4. How does an electing partnership receive an extension of time for filing the Wisconsin Form 3 return if the partnership is not requesting a federal extension?

   Wisconsin allows two different types of extensions: Wisconsin-only extensions and federal extensions.

   Wisconsin-only extensions

   Wisconsin law provides for an extension of up to six months. To claim this extension, check Box B on Form 3 when filing the return and enter the extended due date.

   Federal extensions

   Any extension allowed by the Internal Revenue Service (IRS) automatically extends the Wisconsin due date to the federal extended due date, regardless of when the federal return is filed. To claim a federal extension for your Wisconsin Form 3 return, complete steps A and B below:

   1. Check Box B on Form 3 and enter the extended due date.
   2. Include a copy of the federal extension form or statement with the Form 3 when it is filed. Do not include a copy prior to filing the Form 3.
      
      

   Caution: An extension for filing Form 3 doesn’t extend the time to pay the franchise or income tax. Interest will be charged on the tax not paid by the 15th day of the 3rd month following the close of the taxable year. A partnership can avoid interest charges during the extension period by paying the tax due by that date. A payment can be made electronically or by submitting a check with Wisconsin Form 3 ES, Wisconsin Partnership Estimated Tax Voucher. For information on submitting a payment, visit the department's Make a Payment web page under "Make a Payment - Corporations, Partnerships, & Pass-Through Withholding."

   If Form 3 is filed late, without an extension, the partnership may be subject to penalties and interest.

   For more information about extensions of time to file, see Wisconsin Publication 401, Extensions of Time to File, or the instructions for Wisconsin Form 3.

5. Can a partnership file an amended return to claim the election to pay tax at the entity level if the partnership already filed a Wisconsin Form 3 return without making the election?

   Yes, a partnership may file an amended return to claim the election on or before the extended due date of the Wisconsin Form 3. The partnership must have consent from partners who hold an aggregate of more than 50 percent of the capital and profits of a partnership on the day the amended return is filed to make the election.

6. Can the election be revoked?

   Yes, the election may be revoked by filing an amended Form 3 on or before the extended due date. Partners who hold an aggregate of more than 50 percent of the capital and profits of the partnership must consent to the revocation.

7. How does the electing partnership notify the partners that the election has been made?

   The partnership notifies its partners by checking Box 3 under Part II, Item C of each partner's 2024 Schedule 3K-1, Partner's Share of Income, Deductions, Credits, etc.

8. When making the election, will there be any signatures required to show consent of the partners?

   No, the department does not require any additional signatures to show consent of the partners. Upon request from the department, the electing partnership must prove it received consent from partners who hold an aggregate of more than 50 percent of the capital and profits of the partnership on the day of the election.

9. Can a partnership with a short tax year make the election?

   Yes, the election must be made before the extended due date of the partnership's short-period Wisconsin Form 3. Be sure to use the correct year's tax return when filing. If the tax returns are not yet available, wait until the returns become available (typically November 1) and file under extension. If the current year's tax return will not be available in time, contact the department's Customer Service Bureau at (608) 266-2772 or DORAuditPassThrough@wisconsin.gov.

Applicable Laws and Rules

This document provides statements or interpretations of the following laws and regulations enacted as of November 11, 2024: secs. 71.09, 71.20, 71.21, 71.74 and 71.84, Wis. Stats., and sec. Tax 2.89, Wis. Adm. Code.

Laws enacted and in effect after this date, new administrative rules, and court decisions may change the interpretations in this document. Guidance issued prior to this date, that is contrary to the information in this document is superseded by this document, according to sec. 73.16(2)(a), Wis. Stats.

The department welcomes your input on our guidance. Submit comments on this guidance document.

Guidance Document Number: 100181

November 11​​, 2024