Changes to partnerships employing partners | KPMG | GLOBAL

Immediate changes possibly required, partnerships employing partners through disregarded entity

Changes to partnerships employing partners

Proposed and temporary regulations were issued in early May 2016, relating to the employment tax treatment of employees of a disregarded entity that is wholly owned by a partnership. If the employees of the disregarded entity are also partners in the partnership that owns it, the new regulations may require immediate changes to the withholding and benefits treatment of those individuals.


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The regulations also could affect partnerships that may have taken a position contrary to the new regulations for earlier tax periods (including tax periods in 2016 prior to the effective date of the regulations).


Read a June 2016 report [PDF 215 KB] prepared by the KPMG LLP: What’s News in Tax:  Immediate Changes May Be Required for Partnerships that Employ Partners through a Disregarded Entity

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