Hello! My husband is a partner in a physical therapy business. He owns 15% of the partnership. I (the spouse) am also listed as a co-owner of the partnership, however I don't participate in running the business at all. Should only his name/SSN be on the Schedule SE when we fill out our taxes? Somehow, I must have mixed things up in Turbotax. On the schedule SE currently, it only shows my name and SSN. Due to this, he did not get credit for the income on his SSA statement. I was the only one who got the credit. Main question: should we both show the income on our SSA statements? If that is the case, I'm guessing we need 2 Schedule SEs? Or, should it just be him, since he is running the business day to day.

The income should go on Schedule SE for whoever actually holds the partnership interest and receives the K-1, not necessarily the one who's more involved in day-to-day operations. So the real question is: does the partnership issue a K-1 to your husband alone, or does it issue one to you as well because you're listed as a co-owner on the partnership agreement?

If your husband is the one holding the 15% partnership interest and he's the one who gets the K-1 showing his share of self-employment earnings, then that income and the resulting Schedule SE belong on his return, under his name and Social Security number. That's true even though he's the one running things day to day. The fact that it landed on your Schedule SE instead sounds like a TurboTax input error, probably from how the K-1 was entered or from whose name got tied to the partnership income in the software.

If it turns out you're also a named partner and the partnership actually issues a K-1 to you separately with your own share of income, then yes, you'd each report your own share on your own Schedule SE, since self-employment tax follows whoever's name is on the K-1, not who's doing the work. Passive ownership doesn't get you out of SE tax if you're a general partner receiving a distributive share.

Since correcting this moves self-employment income and Social Security credits to the right spouse, you will need to amend your tax return for the affected year(s) by filing Form 1040-X.

How to Fix This in TurboTax Verify the Form K-1 First: Look at Box A (Partner's SSN) and Box B (Partner's name) on the Form K-1 issued by the physical therapy partnership.

If only your husband's name/SSN is on the K-1: In TurboTax, navigate to the K-1 / Business Income section. Edit the K-1 entry and make sure it is assigned to his name as the owner, not yours. TurboTax will automatically re-allocate the Schedule SE and self-employment tax to his name and SSN.

If both names are listed or separate K-1s were issued: Allocate the income according to each K-1. If you each received a K-1, TurboTax will generate two separate Schedule SEs—one for each spouse—so both of you receive Social Security credits proportional to your reported share.

File Form 1040-X (Amended Return): Once you assign the K-1 to your husband, TurboTax will update Schedule SE to reflect his SSN. Amending will correct his Social Security earnings record with the SSA and ensure his future retirement and disability benefits accurately reflect his partnership earnings.

Check General vs. Limited Partner Status: Note that if your husband is a general partner actively working in the business, his distributive share of partnership trade-or-business income is subject to SE tax. If you are legally listed as a co-owner, whether your share is subject to SE tax depends on whether you are classified as a general or limited partner under the partnership agreement.