About Direct K-1
Direct K-1 is a handy add-on for the 1065 tax application that lets you create text files with tax information and import them into a return. Instead of manually entering data, you can streamline the process with Direct K-1. Plus, you can export tax information from all fields enabled in Direct K-1 into a text file. Information imported into a locator using Direct K-1 Import can also be exported from the locator using Direct K-1 Export.
Availability
Direct K-1 is exclusively available for the 1065 tax application. The tool is normally used to prepare the Schedule K-1s for partnership entities who are required to e-file according to federal and/or state requirements. Generally, these requirements are based on the number of partners in the partnership. It may also be used when a client knows what numbers they want to appear on the Schedule K-1.
Import and Export Capabilities
With Direct K-1, you can import data to Organizer screens, tax forms, and workpapers (yellow paper) when needed. The primary purpose is to let you import data directly to federal and state K-1s, bypassing the system's calculations and allocations, rather than relying on the tax application to calculate those values.
The import file must be a PX3 file — a CSV (Comma-Separated Values) file saved with a *.PX3 extension — formatted according to the DK-1 workbook. This file is used to populate the Schedule K-1 and partner information fields in a new or existing locator.
Field Configuration
Fields specifically enabled by Thomson Reuters are available for import or export with Direct K-1. These fields usually relate to partnership general information, partner data, federal K-1s, state K-1s, certain Direct K-1 specific screens, and various options for system calculations, print, and e-file preferences. All the enabled fields and relevant details are compiled into an Excel workbook called a file set. You can find all current and past file sets on the Help and Support help site by selecting the Data Imports and Exports link on the File Downloads page.
note
Make sure to close a return and check its data back into storage before performing any import or export. Otherwise, you'll encounter an error message.
Direct K-1 import
After you perform an import, you'll notice that the fields display in blue text rather than the usual black text from data entry. You can import data into fields that would normally be computed or carried from another source. This action is permitted and results in an override on that field, indicated by a red circle.
When using an existing return, turn off the
Partner Allocations
option and suppress the Letters and Filing Instructions
option in the Organizer before importing data. A new return (a blank return or with minimal data) works faster and more efficiently than an existing return that already has data, because all allocation formulas activate during the mini compute on existing returns.If you are preparing state returns that are not included in the DK-1 Import Tool, create a new locator for those states and use Partner Bridge to import the partner information.
Schedule K-3 considerations
Special precautions must be taken when the return includes Schedule K-3 data for import. To turn on Schedule K-3 sections, you must include the required form and field names in the import file. If the Direct K-1 import can't populate Schedule K-3 automatically, mark the
Activate Schedules K-2 and K-3
checkbox in the Organizer under Foreign Information ().Before performing an import, and preferably before activating partner allocations, verify that the Schedule K-3 box is marked to turn off partner allocations to Schedule K-3 ().
If data already exists in , delete it before importing. To do so, go to , and select the
Delete ALL Schedule K-3
button.Direct K-1 export
Direct K-1 exports all the return data from every field in your file set — including the organizer, tax form, and workpaper. If a screen doesn't have active data, it won't export. For example, the partnership name shows up at the top of almost every tax form, even if you're not filing that specific form. Those tax forms might not have any active data, so they won't export. Exported files default to the R (Return Level Replacement) flag and are delivered as a PX3 file inside a downloaded ZIP file.
Importing large returns
For large returns with more than a few hundred thousand data records, we recommend that you divide the import into smaller files. For files in the range of 500,000–800,000 lines, use the S replacement flag with the file sorted first by Group Number and then by Form Name. For files with approximately 800,000 or more lines, divide the file into separate files and import them into the same locator sequentially.
Estimated completion times for large imports:
- New returns with 800,000+ lines: 1–2 hours
- Existing returns with 800,000+ lines: 3–4 hours
Completion time depends on the type of locator (new or existing), number of lines in the import file, and network traffic. The smaller the file, the faster the import.
If using the batch import process, don’t select more than 200 import files per import.
State K-1 support
The capability to perform a federal and/or state Direct K-1 Import is normally available when the federal return, and the particular state, is released in the tax application. A full list of states supported for Direct K-1 Import — including which forms are available for e-filing and non-e-filing scenarios — is available in the Direct K-1 Import/Export Guide.
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