Instructions for Filling Out Form 8804

This document offers comprehensive guidance on completing Forms 8804, 8805, and 8813, including information on their purpose, filing requirements, deadlines, and specific line-by-line instructions. It also addresses penalties and issue resolution.

In this article, we'll focus on Form 8804 and provide a step-by-step guide to filling it out.

What is Form 8804?

Form 8804 is an IRS document used by partnerships to report their total liability under section 1446 for the tax year and serves as a transmittal form for Form(s) 8805. Its primary purpose is to pay and report section 1446 withholding tax based on effectively connected taxable income (ECTI) allocable to foreign partners. Partnerships with effectively connected gross income allocable to a foreign partner must file Form 8804, even if they have no ECTI allocable to a foreign partner or withholding tax liability under section 1446. Additionally, partnerships must file a Form 8805 for each partner on whose behalf they paid section 1446 tax, regardless of whether any distributions were made during the tax year.

Who Must File Form 8804?

Form 8804 must be filed by every partnership, excluding publicly traded partnerships, that has effectively connected gross income allocable to a foreign partner. This requirement applies regardless of whether the partnership had effectively connected taxable income (ECTI) allocable to a foreign partner.

Form 8804 Tax Filing Deadlines and Due Dates

• Due date for Form 8804: 15th day of the 4th month following the close of the partnership's tax year
• Extension: Partnerships can request a 6-month extension by filing Form 7004 by the original due date of Form 8804
• Installment payments: If the partnership is required to make installment payments of the withholding tax, Form 8813 must be filed by the 15th day of the 4th, 6th, 9th, and 12th months of the partnership's tax year

Form 8804 Late Payment Penalty

If a partnership fails to pay the tax due on Form 8804 by the deadline, a late payment penalty is typically imposed. This penalty is usually 0.5% (½ of 1%) of the unpaid tax for each month or part of a month the tax remains unpaid, up to a maximum of 25% of the unpaid tax. However, if the partnership can demonstrate reasonable cause for the late payment, the penalty may not apply.

Step-by-Step Instructions for Form 8804

Here are the step-by-step instructions for filling out Form 8804:

1. Part I - Partnership Information: Provide the partnership's name, address, and employer identification number (EIN).
2. Line 1: Enter the total effectively connected taxable income (ECTI) allocable to all foreign partners.
3. Line 2: Multiply the amount on line 1 by the highest rate of tax specified in section 1 or 11(b) of the Internal Revenue Code, as applicable, and enter the result.
4. Line 3: Enter the total amount of tax credits, if any, that the partnership is allowed to claim against the tax liability reported on line 2.
5. Line 4: Subtract line 3 from line 2 and enter the result. This is the partnership's total section 1446 tax liability for the tax year.
6. Line 5: Enter the total amount of section 1446 tax paid by the partnership during the tax year, including any amounts paid with Forms 8813.
7. Line 6: Subtract line 5 from line 4 and enter the result. If the result is a positive number, this is the amount of tax due with Form 8804. If the result is a negative number, this is the amount of overpayment.
8. Line 7: If there is an overpayment on line 6, enter the amount the partnership wants to be refunded. The remaining overpayment, if any, will be applied as a credit to the partnership's section 1446 tax liability for the following tax year.
9. Part II - Tax Paid by Partnership: Complete this part only if the partnership paid section 1446 tax during the tax year. For each payment, enter the date, the amount paid, and the Form 8813 on which the payment was reported.
10. Part III - Tax Paid by Withholding Agent: Complete this part only if a withholding agent paid section 1446 tax on behalf of the partnership during the tax year. For each payment, enter the date, the amount paid, and the withholding agent's name, address, and EIN.
11. Part IV - Tax Paid by Foreign Partner: Complete this part only if a foreign partner paid section 1446 tax on its own behalf during the tax year. For each payment, enter the date, the amount paid, and the foreign partner's name, address, and identifying number.
12. Part V - Certification: An authorized partner or representative of the partnership must sign and date the form, and provide their title and phone number.

How to Submit Form 8804

To submit Form 8804, follow the filing instructions provided by the IRS, which include the appropriate mailing address based on the partnership's location. Ensure that the form is completed accurately, signed by an authorized partner or representative, and submitted by the due date.

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