Oklahoma Form 514: Filing, Nonresident Withholding, and PTE Election

Oklahoma Form 514 is the annual partnership income tax return filed with the Oklahoma Tax Commission by any partnership with Oklahoma-source income. The partnership itself usually owes no income tax because profits flow through to the partners, but the state still requires the return to track how income is allocated. The Oklahoma filing deadline is 30 days after the federal Form 1065 due date, which puts calendar-year partnerships on an April 14 deadline rather than the March 15 federal date.¹

Who Has to File

Every partnership with income from Oklahoma sources files Form 514, regardless of where the partnership is based.² That covers general partnerships, limited partnerships, LLPs, and LLCs that elected partnership treatment for federal tax. Joint ventures, syndicates, and any other unincorporated group that files federal Form 1065 files here too.¹

Oklahoma-source income includes profits from property located in the state, services performed here, goods sold here, and any other business activity with an Oklahoma connection. A Texas-based partnership renting out a building in Tulsa files Form 514 for that rental income. The obligation applies even in a loss year, because the state still needs the return to track how losses flow to partners.

One exception: partnerships that elected under IRC Section 761 not to file federal partnership returns also skip the Oklahoma return.²

What to Gather Before You Start

Pull these together before you open the form. Missing any of them will slow processing or draw a notice.

A complete copy of federal Form 1065 with all schedules. Oklahoma requires it as an attachment, and the federal figures are the starting point for every state calculation.¹
The partnership’s Federal Employer Identification Number. It has to appear on every page, and the Tax Commission cross-checks it against every schedule.
The business activity NAICS code from your Form 1065.
Full information for anyone who was a partner at any point in the year: legal name, current address, taxpayer ID (SSN for individuals, FEIN for entities), ownership percentage, and share of Oklahoma distributive income.
Records of the items that differ between federal and Oklahoma treatment: out-of-state municipal bond interest, U.S. government obligation interest, and any Oklahoma bonus depreciation amounts.

Working Through the Form

Form 514 follows a predictable path. You start with the federal numbers, adjust them for Oklahoma law, then allocate the result among the partners. The packet includes the main return and Supplemental Schedule 514-SUP for additional partner details.

Oklahoma Adjustments to Federal Income

Part 2 of the form is where federal partnership income becomes Oklahoma distributive income through specific additions and subtractions.¹

Common additions:

Out-of-state municipal bond interest that was exempt federally but not under Oklahoma law. Add back the full amount.
Federal depreciation on property for which the partnership previously claimed Oklahoma bonus depreciation on qualified refinery property.

Common subtractions:

Interest on U.S. government obligations, including federal bonds, notes, and Treasury obligations. Attach a schedule listing each obligation.
Oklahoma bonus depreciation, taken in the year the qualified property is placed in service. Not available if 100% federal bonus depreciation was already claimed on the same asset.
Wages equal to the federal Indian Employment Credit under 26 U.S.C. § 45A.

Schedule K and Partner Allocations

Part 3 mirrors federal Schedule K. Column A has to match your federal Form 1065 Schedule K figures exactly.¹ The Oklahoma column then reflects the adjusted amounts from Part 2. Each partner’s share flows from these figures to an Oklahoma Schedule K-1, which the partner uses on their personal state return.

Federal and Oklahoma K-1 amounts have to reconcile. Discrepancies are one of the fastest ways to draw a review. If any partner’s share changed mid-year through a buyout or new admission, document the allocation method and dates on the supplemental schedule.

Signing the Return

Any partner or member may sign. The signature line carries a penalties-of-perjury declaration. If a paid preparer completed the return, the preparer’s information belongs in the designated section.

Withholding on Nonresident Partners

A partnership distributing Oklahoma-source income to a nonresident partner must withhold Oklahoma income tax on that partner’s share at the highest marginal individual rate, currently 4.75%.³ This runs across general partnerships, limited partnerships, LLPs, and LLCs.

Several categories of nonresident members are exempt:⁴

Organizations exempt under IRC Section 501(c)(3).
Partners who file a Nonresident Member Withholding Exemption Affidavit agreeing to Oklahoma’s personal jurisdiction for tax collection.
Other pass-through entities receiving distributions, though the lower-tier entity must then withhold on its own nonresident members.
Publicly traded partnerships under IRC Section 7704, provided they file an annual information return with the Tax Commission.

Instead of withholding individually, the partnership can file a composite return that reports all nonresident partners’ Oklahoma income as one group; including a partner in the composite return satisfies withholding for that partner.³ Composite returns typically apply the highest marginal rate to all income, so partners with lower overall income may pay more that way than filing individually.

The Pass-Through Entity Tax Election

Since 2019, Oklahoma partnerships can elect to pay income tax at the entity level rather than passing the entire burden to individual partners. The election exists as a workaround for the federal $10,000 cap on state and local tax deductions.⁵

Rates depend on the partner type:

Individual, trust, or estate partners: 4.75%, the highest Oklahoma marginal individual rate.¹
Corporate, S corporation, or partnership partners: 4%.⁵

The partnership multiplies each member’s Oklahoma distributive share by the applicable rate and aggregates the results into one entity-level payment. Make the election on OTC Form 586 or directly on Form 514. The window opens at any point during the preceding tax year and closes two months and fifteen days after the start of the current tax year, or on a timely filed return.⁶ Electing partnerships compute the entity’s Oklahoma tax on Form 587-PTE, and if they need more time, they file Form 504-PTE rather than the standard Form 504-C. Partnerships that made the PTE election still file Form 514.

Deadline, Extensions, and Penalties

Form 514 is due no later than 30 days after the federal partnership return due date.¹ For a calendar-year partnership whose federal Form 1065 is due March 15, the Oklahoma deadline is April 14. Fiscal-year partnerships count 30 days from the 15th day of the third month after their fiscal year ends.

Late payment triggers a 5% penalty on the unpaid balance, plus 1.25% interest per month from the original due date until paid.¹ If a taxpayer refuses to file after a written demand delivered by registered mail, the penalty rises to 25% of the assessed amount. Fraud adds a 50% penalty on top of the deficiency.⁷

Two extension paths exist:¹

If you filed federal Form 7004 and owe no Oklahoma tax, the state deadline extends automatically. Attach the federal Form 7004 to your Oklahoma return when you file.
If tax is due, or you didn’t file federally, use Oklahoma Form 504-C. Partnerships that made the PTE election use Form 504-PTE. Total extension cannot exceed six months.

An extension only pushes back the filing deadline, not the time to pay. Pay at least 90% of the tax owed by the original due date to avoid the 5% delinquency penalty.

How to Submit the Return

The Tax Commission encourages electronic filing and lists approved e-file products on its website at tax.ok.gov.¹ The Oklahoma Taxpayer Access Point (OkTAP) is where you manage the account, check filing status, and amend returns.⁸ Save the confirmation number the system generates after e-filing; it’s your proof of timely filing.

Paper filers print Form 514 from the Tax Commission’s website and mail it to the address in the form’s instructions. The envelope must be postmarked by the deadline. Paper takes longer to process, so check OkTAP periodically to confirm the return was accepted. Keep the signed return, mailing receipt, and all attachments for at least three years.

If the IRS Adjusts Your Federal Return

When the IRS adjusts your federal partnership return after you’ve filed Form 514, Oklahoma requires you to report the changes. File an amended return using Schedule 514-X and attach a complete copy of the federal Revenue Agent’s Report.¹ Any consent you signed extending the federal adjustment period automatically extends Oklahoma’s window for corresponding state adjustments. File Schedule 514-X once the federal changes are final; the Tax Commission can otherwise assess additional tax on its own, with interest running from the original due date.

1
Oklahoma Tax Commission. Form 514 Oklahoma Partnership Income Tax Return
2
Justia. Oklahoma Code 68-2368 – Persons Required to Make Returns
3
Oklahoma Administrative Code. OAC 710:50-3-54 – Income Tax Withholding for Pass-Through Entities
4
Oklahoma Administrative Code. OAC 710:90-3-11 – Income Tax Withholding for Pass-Through Entities
5
Justia. Oklahoma Code 68-2355.1P-4 – Calculation of Tax
6
Oklahoma Administrative Code. OAC 710:50-3-47 – Pass-Through Entity Tax Equity Act of 2019
7
New York Codes, Rules and Regulations. 68 Oklahoma Statutes 2375 – Payment of Tax, Delinquency, Penalties and Interest
8
Oklahoma Tax Commission. Help Center: Businesses