Show all hidden content
Overview
Federal 1040 Schedule A limits the itemized deduction for state income taxes paid to $10,000. However, some states let S corporations pay state taxes on behalf of a shareholder. The S corporation can then take an itemized deduction on Form 1120 for state income taxes paid that's not subject to the $10,000 limit. As a result, the amount of federal income that passes through from the entity reflects an itemized deduction for the entire amount of state taxes paid. The overall taxable income that the individual taxpayer reports on Form 1040 is then less than if the S corporation had not paid taxes on behalf of the Individual.
States that allow these pass-through entity tax (PTET) credits provide a means to calculate a tax at theS Corporationlevel using:
a separate tax form (similar to a composite return), or
Fields within the main return designed to calculate a tax.
The state's K-1 (or equivalent) will include reporting information required to prepare the shareholder's tax return.
State-specific entry
Alabama
To add Form EPT to the Alabama return, go to
File
thenClient Properties
. SelectEPT Pass-Through Entity Tax
on the Alabama tab.Form EPT is a separately filed return, and you can e-file it.
Arizona
To elect PTET, go to the AZGenS screen and select
Elect to pay Pass-through entity tax(Scorp)
. Tax is calculated on Form120S, Page 3,Part 2, Line 47 and Line 51.You can review filing instructions on the AZ website.
Arkansas
To add Form 1100PET to the Arkansas return, go to the ARGenS screen and select
Elect to pay tax at the entity level (Form 1100PET)
. In addition to Form 1100PET, there are also Form AR 362for the election and Form AR 1155-PET for the extension.You can e-file the PTET forms.
You can review filing instructions and FAQs on the AR website.
California
To add Form 3804 to the California return, go to
View
thenShareholder Information
. SelectElecting pass-through entity tax
for each applicable shareholder.Form 3804 is filed with Form 100S
Form 3893 is a separate payment voucher for the PTE tax, filed to a separate location from the 100S
Estimated tax payments can also be paid with Form 3893.
Additional information can be found here: https://www.ftb.ca.gov/file/business/credits/pass-through-entity-elective-tax/index.html
Colorado
To elect PTET, go to the COGenS screen and select
Elect to file and pay Pass-through entity tax
. Tax is calculated on FormDR 0106, Page 2,Part 3, Line 20.Georgia
To elect PTET, go to the GAGenS screen and select
S Corporation elects to pay the tax at the entity level (Scorp)
.Visit 560-7-3-.03 Election to Pay Tax at the Pass-Through Entity level for more information on the pass-through entity tax calculation and filing requirements.Hawaii
To elect PTET, go to the HIGenS screen and select
Elect to pay tax at the entity level
. Tax is calculated onSchedule PTE, Pass-through Entity Tax Calculation and Schedule PTE-U, Upper-Tier Pass-Through Entity Tax Credit Allocation (if applicable). These schedules will be part of the e-file.Visit https://files.hawaii.gov/tax/legal/tir/tir23-01.pdf and https://files.hawaii.gov/tax/legal/tir/tir23-03.pdf for more information on the pass-through entity tax calculation and filing requirements.Idaho
To elect to be an affected business entity, go to the IDGen screen and select
Elect to be affected business entity
. Tax is calculated on Form 41S, Page 2, Line 44.Illinois
To elect PTET, go to the ILGen screen and select
Elect to pay Pass-through entity tax
. PTE Income calculates on the IL Pass-Through Entity Tax Income Worksheet.The Income is on Form IL-1120-ST, Page 3, Line 60.The Pass-Through Entity Tax is on Form IL-1120-ST, Page 3, Line 61.Additional Information can be found here: https://www2.illinois.gov/rev/questionsandanswers/Pages/689.aspx
Indiana
To elect PTET, go to the INGen screen and select
Elect to file and pay Pass-through entity tax
. The tax is calculated on Schedule IN-PTET.Iowa
To elect PTET, go to the IAGen screen and select
Elect to file and pay Pass-through entity tax
. The tax is calculated onIA 1120S, Page 4, Part 6. Visit https://tax.iowa.gov/idr-releases-updated-tax-guidance-pass-through-entity-tax for more informationKansas
To elect PTET, go to the KSGenS screen and select
Elect to pay tax at the entity level
. Tax is calculated onForm K-120S, Page 2, Line 31.Visit https://www.ksrevenue.gov/pdf/k-120s22.pdf for more informationKentucky
To add Form 740-PTET to the Kentucky return, go to
File
thenClient Properties
. Select740-PTET Pass-Through Entity Tax
on the Kentucky tab.Once added, go to the KYPTE screen and select
Elect to file and pay Pass-through entity tax
.The following forms are available.
Form 740-PTET, Kentucky Pass-Through Entity Tax
Form KPTET-V, Kentucky Pass Through Entity Tax Payment Voucher
Form PTET-CR, Kentucky Pass-Through Entity Tax on Distributive Share Income
Form 740-PTET-ES, Pass Through Entity Tax Estimated Voucher
Form 740-PTET-EXT, Extension of Time to File Kentucky Form 740-PTET
KY PTET Financial Transaction Record
KY PTET Late Filing Interest and Penalty Worksheet
Form 740-PTET is a separately filed return, and you can e-file it.
Visit https://revenue.ky.gov/Business/Pass-Through-Entities/Pages/default.aspx for more information.
Maryland
To addForm 511, Pass-Through Entity Election Income Tax Return,to theMaryland return, go to the General folder of an S-Corp return and mark the
Elect to pay tax at the entity level (Form 511)
checkbox.Massachusetts
To add Form 69D-ELT to theMassachusettsreturn, go to
File
thenClient Properties
. Select63D-ELT Entity Level Tax
on theMassachusettstab.Once added, go to the MAELT screen and select
Pass-through entity has elected to pay at the entity level
.Taxis 5% of qualified income. Qualified members still need to file their normal individual return or be part of a composite return, but will get a credit for 90% of their allocated Entity Level Tax.
The Entity level tax return is a stand alone return with its own separateextension and estimates. You're required to e-file the return and extension and pay electronically, either using Electronic Funds Transfer (EFT) on the state's MassTaxConnectwebsite or using Electronic Funds Withdrawal (EFW) in UltraTaxCS.
You can find filing instructions and FAQs on Massachusetts website.
Michigan
Enter the flow-through entity tax credit on the MICrS screen in
Flow-through entity tax credit
.The shareholder’s share of the amount you enter in this field calculates on the MI Shareholder’s Share of Income and Modifications Worksheet and on Form 807, Page 3, Column 4 Allocated Share of Flow-Through Entity Tax Credit if applicable.Enter the State amount of the taxes in
Taxes on or measured by net income
on the MICrS screen. The shareholder’s share of the amount you enter in this field calculates on the MI Shareholder’s Share of Income and Modifications Worksheet.Additional Information: https://www.michigan.gov/documents/treasury/19773_FTE_tax_notice_745849_7.pdf
Minnesota
To elect PTET, go to the MNGenS screen and select
Pass-through Entity (PTE) Tax
. Tax is calculated onSchedule PTE and reported/paid/filed with Form M8.Visit https://www.revenue.state.mn.us/pass-through-entity-pte-tax for more informationMississippi
To elect PTET, go to the MSGen screen and select
Election to pay tax on behalf of all shareholders (S.A.L.T. response)
. Tax is calculated onForm84-105, Page 1,Line 6.Visit Updated EPTE FAQ for more information.
Missouri
To add Form MO-PTE to theMissouri return, go to
File
thenClient Properties
. SelectMO-PTE Pass-through Entity Tax
on theMissouri tab.Once added, go to the MOPTE screen and select
Elect to file and pay Pass-through entity tax
.Form more information, see https://dor.mo.gov/faq/taxation/business/entity-tax.html.
Montana
To elect PTET, go to the MTGenS screen and select
Elect to file and pay Pass-through entity tax
. Income and tax are calculated onForm PTE, Page 2, Line 24 and Line 25. You can find FAQs and Instructions on Montana's website.Nebraska
To elect PTET, go to the NEGenS screen and select
S Corporation elects to pay tax at the entity level
. Income and tax are calculated onNebraska Schedule PTET. For more information, visit https://revenue.nebraska.gov/about/frequently-asked-questions/pass-through-entity-tax-faqs.New Jersey
To elect PTE tax, New Jersey requires an annual election to be made on-line at NJ Pass-Through Business Alternative Income Tax (PTE) Login (state.nj.us).
After the annual election has been made, go to Client properties and select PTE-100 Pass through Entity Tax on the New Jersey tab.
Next, visit Screen NJPTEGen and mark the Entity has timely filed the on-line election to file Form PTE-100 for current tax year field.
The tax is calculated on Form PTE-100, Page 1, Line 2.
For New Jersey, Form PTE-100 is a separate return, and can be e-filed separately, as well as its extension (PTE-200T) and Estimates (PTE-150).
Visit State of NJ - Department of the Treasury - Division of Taxation - PTE/BAIT FAQ for further information.
New Mexico
To elect PTET, go to the NMGenS screen and select
Electing entity-level tax
. Tax is calculated on Form S-Corp-1, Line 27. For more information, visit New Mexico's website.New York
The tax should be filed online through NY Web File.To add it to the return,go to
File
thenClient Properties
. SelectPass-through Entity Tax
on theNew York tab.UltraTax CS calculates the PTE Taxable Income on the PTE Computation of PTE Taxable Income Worksheet.
Additional information on the filing of this return can be found here: https://www.tax.ny.gov/bus/ptet/
New YorkCity
The tax should be filed online through NY Web File.To add it to the return,go to
File
thenClient Properties
. SelectPass-through Entity Tax
on theNew York tab.UltraTax CS calculates the NYC PTE taxable Income and PTET tax on the Computation of PTE Taxable Income Worksheet.
Additional information on the filing of this return can be found here: https://www.tax.ny.gov/bus/ptet/
North Carolina
To elect PTET, go to the NCGen screen and select
Elect to file and pay as a Taxed S Corporation
. Tax is calculated onForm CD-401S, Page 2 Line 19.Ohio
To add FormIT4738to the Ohio return, go to
File
thenClient Properties
. SelectIT 4738 Pass-through Entity Tax
on theOhio tab.Tax is calculated onFormIT4738, Electing Pass-Through Entity Income Tax Return, which is a separate return you can e-file. You can find more information on Ohio's website.Oregon
To add Form OR-21 to theOregon return, go to
File
thenClient Properties
. SelectOR-21 Pass-through Entity Tax
on theOregon tab.Once added, go to theORPTEGenscreen and select an option in
Elect or revoke election to file and pay pass-through entity tax
.The following forms are available:
FormOR-21, Oregon Pass-through Entity Elective Tax Return
ScheduleOR-21-AP, Oregon Pass-through Entity Elective Tax Apportionment of Income
Schedule OR-21-MD, Oregon Pass-through Entity Elective Tax Member Directory
Schedule OR-21-MD-PT, Pass Through of Distributive Share of Proceeds, Addition and Credit
Schedule OR-21-K-1,Distributive Share of Proceeds, Addition and Credit
Form OR-21 is a separately filed return, and you must e-file it.
Form more information, see https://www.oregon.gov/dor/programs/businesses/Pages/Pass-Through-Entity-Elective-Tax.aspx.
Rhode Island
To add Form RI-PTE to the Rhode Island return, select
File
,thenClient Properties
. SelectRI-PTE Pass-through Entity Tax
on the Rhode Island tab.Once added, go to the RIPTE screen and select
Elect to file Form RI-PTE for individual shareholders
.Form RI-PTE is a separately filed return. You can't file it electronically. Those subject to the electronic filing mandate may need to file Form RI-PTE through the Rhode Island Tax Portal.
Go to https://tax.ri.gov/sites/g/files/xkgbur541/files/2024-02/ADV_2024_10_PTE_Update.pdf for more information.
South Carolina
To elect PTET, go to the SCGen screen and select
ActiveTrade/Business Income for electing S Corporation
. Tax is calculated on Schedule I-435 and reported/paid/filed with Form SC1120S. ScheduleI-435, Column C defaults to the Schedule, SC1120S K-1, Column D (totaled for all shareholders).Those amounts can be forced on Screen SCAdj.Utah
Utah has online filing only, through Taxpayer Access Point (TAP) website.
The PTE must file and pay SALT tax on or before the last day of the taxable year, then report the amount of SALT tax paid on Form TC-20S, Schedules N, K, and K-1. UltraTax CS will not calculate SALT tax. Use the
AP - Tax paidby pass-through entity
field on the UTCrS screen to report the SALT tax information that was previously filed/paid through the UT TAP website.For more information, visit SALTReport & Tax FAQ.
Virginia
To elect PTET, go to the VAGenS screen and select
Election to pay Virginiaincome tax at the entity level for the taxable year
. Tax is calculated onForm 502PTET andForm 502PTET ADJ. This return must be e-filed.For more information,visit Virginia's website.
West Virginia
To elect PTET,enter informationon the WVPTE screen to calculate Schedule EK-1,Schedule of WV Partner/Shareholder/Member/Beneficiary Elective Pass-through Entity Income Credit. Any entity that elects to pay the pass-through entity tax will no longer be obligated to file the PTE-100 (S Corporation main form).You'llneed to file Form EPT-100 through the WV MyTaxes portal.WV doesn't expect to have any other EPT-100 substitute forms.
For more information,visit West Virginia's website.
Wisconsin
To elect PTET, go to the WIGen2 screen and select
Electing to pay tax at the entity level
. Tax is calculated on Schedule 5S-ET and reported on Form 5S, Page 1.