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Enter a pass-through entity tax (PTET) credit for a 1040 return
Overview
Federal 1040 Schedule A limits the itemized deduction for state income taxes paid to $10,000. However, some states let partnerships and S corporations pay state taxes on behalf of a partner or shareholder. The partnership or S corporation can then take an itemized deduction on Form 1065 or 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 partnership or S corporation hadn’t paid taxes on behalf of the Individual.
States that allow these pass-through entity tax (PTET) credits may do so by:
- Reporting a credit on the state return for the tax paid by the pass-through entity, or
- Reporting a subtraction on the state return for the income from the pass-through entity for which taxes have already been paid by the entity.
State-specific entry
Alabama
Alabama lets partnerships and S corporations pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Enter the current year amount from partnership or S corporation in the
Pass-through entity taxes (State return only)
field on the federal K1-4
screen. The amount of tax paid from screen
K1-4
is reported on Schedule CP, Composite Payments/Electing PTE Credits. You can complete detailed data entry for Schedule CP on the ALAdj2
screen.Arizona
Arizona lets partnerships, S Corps, and Trusts pay Arizona taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a credit on Form AZ140 for the taxes paid on their behalf by the pass-through entity.
Use the
AZCr
screen to enter the amount for Pass-Through Entity Tax Credit. This amount data shares.Use the
AZAdj
screen to enter the amount for Pass-Through Entity Tax Credit. This amount data shares.Arkansas
Arkansas lets partnerships, S corporations, and limited liability companies pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Taxpayers can claim a subtraction for Pass-Through Entity adjustment for exempt income on Form AR-OI (alternately, you can take a Pass-Through Entity adjustment for exempt losses distributed by an electing PTE, which will be reported as an addition on Form AR-OI). Enter the current year subtraction adjustment amount in the
Pass-through entity taxes (State return only) - subtraction
field on the federal K1-4 screen. Enter the current year addition adjustment amount in the Pass-through entity taxes (State return only) - addition
field on the federal K1-4 screen. When using data share from S Corporations and Partnership returns prepared in UltraTax CS, the pass-through entity income/loss transfers to the state
Adj
screen.California
California lets partnerships and S corporations as well as trusts/estates pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can claim a Code 242 credit on Form 540/540NR Schedule P(540/540NR) for the taxes paid on their behalf by the pass-through entity.
Enter the current-year amount from Partnership or S Corporation on the federal
K1-4
screen in the field for Pass-through entity taxes (State return only)
or the California CAK1-4
screen in the field for Pass-Through Entity Elective Tax Credit
. If entering at the federal level, use CA postal code on the K1
screen for the California credit amount, or use the multi-state allocation spreadsheet to enter the California amount. Enter the current-year amount from the trust or estate on the federal
K1T-3
screen in the Pass-through entity taxes (State return only)
field or the California CAK1T-3
screen in the Pass-Through Entity Elective Tax Credit
field. If entering at the federal level, use CA postal code on the K1T
screen for the California credit amount, or use the multi-state allocation spreadsheet to enter the California amount.Carryover from the prior year is proforma'd to or entered on the
CACrCO-2
screen.Form 3804-CR, Pass-Through Entity Elective Tax Credit, is provided as supporting documentation required to claim the credit. In addition to entering the current-year credit amount as described previously, for pass-through credit from S Corporation or Partnership, enter the related California Corporation Number or Secretary of State Number on the
CAK1
screen to be included on Form 3804-CR.When using data share, for S Corporation and Partnership, the California Pass-Through Entity Elective Tax Credit transfers to the 1040
K1-4
screen from the 1120-California Schedule K-1 (100S) line 13d statement or from 1065-California Schedule K-1 (565) line 15f statement. For Trust/Estate, the amount transfers to the 1040 K1T-3
screen from 1041-California Schedule K-1(541) line 14d statement.Colorado
Colorado allows partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual, partner, or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a credit on Form DR 0104CR for the taxes paid on their behalf by the pass-through entity.
Enter the current-year credit amount from Partnership or S Corporation on federal Screen
K1-4
in the Pass-through entity taxes paid (state only)
field.Enter the current-year credit amount from Trust/Estate on the federal
K1T-3
screen in the Pass-through entity taxes paid (state only)
field.The federal screens need to be postal coded to Colorado for amounts to transfer to the Colorado product. Amounts entered in these fields are summed up and recorded on CO Form DR 0104CR, Page 2, line 11.
Enter the current-year addback amount from Partnership or S Corporation on federal Screen
K1-4
in the Pass-through entity taxes paid (state return only) - addition
field.Enter the current-year addback amount from Trust/Estate on the federal
K1T-3
screen in the Pass-through entity taxes paid (state return only) - addition
field.The federal screens need to be postal coded to Colorado for amounts to transfer to the Colorado product. Amounts entered in these fields are summed up and recorded on the CO State Income Tax Deduction Addback Worksheet, line h, and ultimately transfer to CO Form DR 0104, Page 1, line 2.
Qualified Business Income Deduction addback relating to the SALT Parity election is entered on the
CO Adj
screen in the Qualified business income deduction addback (Force)
field; other QBID amounts must also be included when forcing the amount.When using data share for partnerships and S corporations, the pass-through entity tax credit will transfer to the federal
K1-4
screen.Connecticut
Connecticut allows partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual, partner, or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a credit on Form CT-1040 or CT-1040NR/PY for the taxes paid on their behalf by the pass-through entity.
Enter the current year amount from Partnership or S Corporation on federal Screen
K1-4
in the Pass-through entity taxes paid (state only)
field. Enter the current year amount from Trust/Estate on federal Screen K1T-3
in the Pass-through entity taxes paid (state only)
field. The federal screens must be postal coded to Connecticut for amounts to transfer to the CTCr
screen. When using data share for partnerships and S corporations, the pass-through entity tax will transfer to federal Screen
K1-4
.Georgia
Georgia allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can then modify individual taxable income on Schedule 1 Adjustments to Income based on Georgia Law.
Allocable share of loss that was apportioned and allocated at the entity level is entered on Schedule 1, Line 5 of Form 500 with description PTEADD and enter the allocable share of income that was taxed at the entity level on Schedule 1, Line 12 of Form 500 with description PTEDED.
To create a statement for income and losses, enter the current year amount from Partnership or S Corporation in the
Pass-through entity adjustments
field, on the Georgia GAAdj
screen. note
- UltraTax CS includes this statement as a part of the e-file per state instruction.
- When using data share for partnerships and S corporations the pass-through entity income/loss will be automatically added in thePass-through entity adjustmentsfield. Only non-datashared pass-through entities need to be entered on the statement window.
Hawaii
Hawaii allows Partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Enter the current year PTE tax amount from a
partnership or S corporation
on the federal K1-4 screen in the Pass-through entity taxes (State return only)
field.Enter the current year PTE tax amount from a
trust or estate
on the federal K1T-3 screen in the Pass-through entity taxes (State return only)
field. Taxpayers can then claim a credit on Form N-362 for the taxes paid on their behalf by the pass-through entity. The PTE tax amount will also be reported as addition to income on Form N-11, Page 2, Line 10 or Form N-15, Page 2, Line 19 regardless of PTE tax credit claimed on Form N-362.
note
When using data share for a partnership, the pass-through entity tax will transfer to the federal K1-4 screen. The PTE tax amount currently doesn’t data share from S corporation or trusts/estate.
Idaho
Idaho allows partnerships, S corporations, and trusts to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a subtraction on the main return Form 40 for the taxes paid on their behalf by the pass-through entity.
Enter the amount of the pass-through entity subtraction in the
State income tax withheld
field on federal Screen K1-4
. This amount will be reflected in the Pass-through withholding paid by the entity
field on Screen EFK1-2
in the ID > Electronic Filing
folder. note
This amount doesn’t data share.
Illinois
Illinois allows partnerships, S corporations, and trusts to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers are then allowed to claim a credit on Form IL1040 for the taxes paid on their behalf by the pass-through entity.
Enter the current year amount from Partnership or S Corporation on the federal
K1-4
screen or the Illinois ILK1
screen. Enter the current year amount from Trust/Estate on the federal K1T-3
screen or the Illinois ILK1T
screen.note
When using data share for partnerships and S corporations, the pass-through entity tax will transfer to the federal
K1-4
screen. For Trusts/Estates the amount transfers to the federal K1T-3
screen.Indiana
Indiana allows partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can claim a refundable credit on Form IT-40/Schedule 5 or Form IT-40PNR/Schedule F for the taxes paid on their behalf and claimed as a deduction on the federal return of the pass-through entity. The following data entry amounts are included on the line for PTE credit on IT-40/Schedule 5 or IT-40PNR/Schedule F.
- PTE credit amounts from the Indiana Partnership or S Corporation Schedule IN K-1 (IT20S/IT65), Part 2, that are entered with IN postal code via federal screenK1-4(or in the multi-state allocation spreadsheet) in the field forPass-through entity taxes (State return only).
- PTE credit amounts from the Indiana Trust or Estate Schedule IN K-1 (IT-41), Part 2, that are entered with IN postal code via federal screenK1T-3(or in the multi-state allocation spreadsheet) in the field forPass-through entity taxes (State return only).
The amounts for Indiana PTE credit entered via federal Screens
K1-4
or K1T-3
transfer to Screens INK1SP
and INK1ET
. Information from Screens INK1SP
and INK1ET
is used to reconcile amounts from the IT-40 or IT-40PNR return in the Indiana electronic file and don’t affect the calculations of the Indiana return.Iowa
Iowa allows partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual, partner, or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a credit on Form IA-1040 for the taxes paid on their behalf by the pass-through entity.
Enter the current year amount from Partnership or S Corporation on federal Screen
K1-4
in the Pass-through entity taxes paid (state only)
field. Enter the current year amount from Trust/Estate on federal Screen K1T-3
in the Pass-through entity taxes paid (state only)
field. The federal screens must be postal coded to Iowa for amounts to transfer to the IACr
screen. Kansas
Kansas allows taxpayers to claim a Pass-Through Entity Elective Tax Credit on Form K40.
Enter the current year amount in the
Pass-through entity taxes (State return only)
field on federal Screen K1-4
. This amount transfers to Credit for tax paid on form K120-S
field on Kansas Screen KSCr
. Users may enter K-1 information on this screen instead of federal Screen K1-4
. Kentucky
Kentucky-based pass-through entities can elect to pay state taxes on behalf of the individual partner/shareholder/owner/beneficiary attributable to income from the pass-through entity. Enter the current year amount from a partnership or S corporation in the field
Pass-through entity taxes (State return only)
on federal screen K1-4
. When necessary, this information reaches UltraTax/1040 via data sharing from the business product. The amount on the federal K1-4
screen transfers to the Kentucky income tax paid by entity
field on the state KYPTE
screen. Credit amounts and entity information from Single Member LLCs, estates, and trusts must be entered manually on the state KYPTE
screen after making the selection in the Type of entity
field.The accumulated amount of all electing pass-through entities' income tax paid from the
KYPTE
screen is claimed as the refundable pass-through entity tax credit
on Form 740/740-NP.Louisiana
There is no data share for 1040-LA.
Enter the adjustment on the Louisiana
LAAdj
screen.The
Entity Level Taxes Paid to Other States
field will become a code 23E adjustment on Schedule E, and the Pass-through entity exclusion
field will become a code 24E adjustment on Schedule E. Massachusetts
Massachusetts allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
In the Credits folder, on the
MACr-1
screen, in the Other Refundable Credits section, select Refundable credits
. Enter "EX" for the Credit Code
and leave the Certificate Number
blank. Michigan
Michigan allows partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual, partner, or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a credit on Form MI-1040 for the taxes paid on their behalf by the pass-through entity. Michigan also requires that additions be reported on MI-Sch 1, Line 2, and refunds from pass-through entities are reported on MI-Sch 1, Line 16.
Enter the current year amount from Partnership or S Corporation on the federal
K1-4
screen in the Pass-through entity taxes paid (state only)
field. Enter the current year amount from Trust/Estate on the federal K1T-3
screen in the Pass-through entity taxes paid (state only)
field. The federal screens must be postal coded to Michigan for amounts to transfer to the Michigan product. Amounts entered in these fields are summed up and recorded on MI-1040 Page 2, line 29. An addition is also recorded on MI Schedule 1, Line 2. Enter the current-year addback amount from Partnership or S Corporation on the federal
K1-4
screen in the Pass-through entity taxes paid (state return only) - additions
field. Enter the current-year addback amount from Trust/Estate on the federal K1T-3
screen in the Pass-through entity taxes paid (state return only) - additions
field. Amounts entered in these fields are summed up and recorded on MI-Schedule 1, line 2. A subtraction for refunds from pass-through entities is recorded on MI Schedule 1, Line 16. Enter the current-year refund amount from Partnership or S Corporation on the federal K1-4
screen in the Pass-through entity taxes paid (state return only) - subtractions
field. Enter the current-year refund amount from Trust/Estate on the federal K1T-3
screen in the Pass-through entity taxes paid (state return only) - subtractions
field. Amounts entered in these fields are summed up and recorded on MI-Schedule 1, line 16. When using data share for partnerships and S corporations, the pass-through entity tax will transfer to federal Screen
K1-4
.Mississippi
Mississippi-based partnerships and S corporations can elect to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Enter the current year amount from partnership or S corporation in the field
Pass-through entity taxes (State return only)
on federal screen K1-4
. When necessary, this information reaches UltraTax/1040 via data share from the business product. The amount on the federal K1-4
screen transfers to the Amount of tax paid
field on the state MSK1
screen. All electing pass-through entities' taxable income and amount of tax paid from the
MSK1
screen are reported on form 80-161. The accumulated amount of tax paid is claimed as the non-refundable Credit for tax paid on an electing Pass-Through Entity Tax Return
on Form 80-105/205. Include supporting documentation with the Mississippi return when claiming this credit. When filing electronically, select
Edit
, Electronic Filing Attachments...
, then MS K-1
from the predefined attachment titles. Go to the attachment file source and select the file. Missouri
Missouri allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a non-refundable credit on MO-TC for the Missouri taxes paid on their behalf by the pass-through entity.
Enter the current year amount from Partnership or S Corporation in the
Pass-through entity taxes (State return only)
field on the federal K1-4
screen. This amount transfers to the SALT Parity (SPA)
field on the Missouri MOCr
screen. Include supporting documentation with the Missouri return when claiming this credit. When filing electronically, select
Edit
, Electronic Filing Attachments...
, Pass Through Entity Report
from the predefined attachment titles, then go to the Attachment file source document for the PDF to be included. It is important to use the predefined attachment title to avoid rejections. It's helpful to name the PDF attachment Pass Through Entity Report
. New Jersey
New Jersey allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Enter the
Pass-Through Business Alternative Income Tax Credit
from the Schedule NJK-1 and the Schedule PTE-K-1 for partnerships or the Schedule NJ-K-1 (Form CBT-100S) and the Schedule PTE-K-1 for S Corporations. This amount will then be on the New Jersey NJK1
screen and will be used in the following places: - Schedule NJ-BUS-1, Part II for partnership or Part III for S corporation
- Schedule NJ-BUS-1 (Form NJ-1040NR), Part III for partnership or part IV ford corporation
- NJ-1040 page 4 as Pass-Through Business Alternative Income Tax Credit (all activities)
- NJ-1040NR page 3 as Pass-Through Business Alternative Income Tax Credit (all activities)
Additional data entry is required on the New Jersey
NJEFKP
or NJEFKS
screens if there is Pass-Through Business Alternative Income Tax on the New Jersey K-1 the taxpayer received from the Partnership or S Corporation.note
The Pass-Through Business Alternative Income Tax is reported in 2 pieces to the taxpayer.
- The Schedule PTE-K-1 that calculates the Partnership/S Corporation tax paid by the entity.
- The Schedule NJK-1 and/or Schedule NJ-K-1 (Form CBT-100S) which is the tax paid by an entity owed by the Partnership/S Corporation and passed through to the entity, which issued the NJK-1 or NJ-K-1.
Both pieces are combined and reported on the return but only the NJ-K-1 gets reported in the e-file record.
New Mexico
New Mexico allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can then modify individual taxable income on Form PIT-ADJ Schedule of Additions, Deductions, and Exemptions.
Allocable share of loss that was apportioned and allocated at the entity level is entered on Form PIT-ADJ as an Exemption for net income subject to the Entity Level Tax.
To create a statement, enter each pass-through entity as a separate line on the NMAdj screen in the
Amount of tax paid by Pass-Through-Entity on distributed net income
statement window.New York
New York allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can then claim a refundable credit on Form IT-201 or IT-203 for the taxes paid on their behalf by the pass-through entity.
Enter the current year New York State amount from Partnership or S Corporation on the federal
K1-4
screen. Enter the current year New York City amount in the Pass-through entity tax credit - NYC
field, on the New York K1
screen. Enter the current year New York State and New York City amount from Trusts in the statement field on the New York Cr-6-3
screen. Form IT-653, Pass-Through Entity Tax Credit, is provided as the supporting documentation required to claim the credit. In addition, IT-225 New York State Modifications is provided as supporting documentation for the required corresponding Addition Adjustment for the credit claimed.
- Code A-219 represents the NYS addition.
- Code A-222 represents the NYC addition.
When using data share for S Corporation and Partnership, the New York Pass-Through Entity Elective Tax Credit transfers to federal
K1-4
screen.When using data share for S Corporation and Partnership, the New York City Pass-Through Entity Elective Tax Credit transfers to New York screen
K1
.North Carolina
North Carolina allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity. Taxpayers can then modify individual taxable income on D-400 Schedule S based on North Carolina law.
To adjust North Carolina taxable income, enter the income from the taxed pass-through entity as a deduction with code 15 on screen
NCAdj
, or the loss from the taxed pass-through entity as an addition with code 14 on screen NCAdj
.When using data share for S-corporations, the pass-through entity income/loss will be automatically added to screen
NCAdj
.Ohio
Ohio allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Taxpayers can claim a Pass-Through Entity Elective Tax Credit on Schedule of Credits. Enter the current year amount from Partnership or S Corporation on federal Screen
K1-4
.When using data share from S Corporation and Partnership returns prepared in UltraTax CS, the Ohio Pass-Through Entity Elective Tax Credit transfers to the federal
K1-4
screen from Ohio IT-K-1 line 3.Oklahoma
Oklahoma allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Taxpayers can claim a subtraction for
Oklahoma income distributed by an electing PTE
on Schedule 511-A (alternately, an Oklahoma loss distributed by an electing PTE
is reported as an addition on Schedule 511-B). Enter the current year amount from Partnership or S Corporation on federal Screen K1-2
. When using data share from S Corporations and Partnership returns prepared in UltraTax CS, the attributable income (loss) transfers to the federal
K1-2
screen.Oregon
Oregon allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity, and requires taxpayers to include an addition to income for any PTE-E tax paid on behalf of the individual partner or shareholder.
In the Taxes folder, in the Income and Loss section on the
ORPTE
screen, enter information into Addition for tax deducted at federal level
to create an addition with code 167 on Schedule OR-ASC or OR-ASC-NP. Information entered in the Credit for PTE-E tax paid
will create a refundable credit with code 900 on Schedule OR-ASC or OR-ASC-NP. If the activity is a k1, a state code of 18 must be entered for the PTE can transfer over. note
These amounts both data share the same number from the federal
K1-4
screen, and let the user enter a different amount in either field if necessary.Rhode Island
Rhode Island allows partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Enter the current year amount from
partnership or S corporation
in the Pass-through entity taxes (State return only)
field on the federal K1-4 screen.Enter the current year PTE amount from a
trust or estate
on the federal K1T-3 screen in the Pass-through entity taxes (State return only)
field.This amount transfers to the RI Income & Adjustments screen as Code 10 "Modifications increasing adjusted gross income." It is then reported on Schedule M, line 2h as Pass-through Entity Tax Elected to be Paid.
note
The PTE tax amount data shares from an 1120S-RI return to the
K1-4
screen. Amounts manually entered on the RIAdj
screen for Code 10 will override data shared amounts. The PTE tax amount doesn't data share from partnerships or trusts/estate.Rhode Island also allows a deduction for Pass-Through Entity tax claimed in the prior year - a portion of which was refunded to a cash basis entity.
Enter the current year PTET deduction amount from
partnership or S corporation
in the Pass-through entity taxes (State return only) – subtraction
field on the federal K1-4 screen.Enter the current year PTET deduction amount from a
trust or estate
on the federal K1T-3 screen in the Pass-through entity taxes (State return only) - subtractions
field.This amount transfers to
RI Income & Adjustments
screen as Code 24 "Modifications decreasing adjusted gross income." It is then reported on Schedule M, line 1u as CASH BASIS ONLY - Deduction for Pass-Through Entity Tax claimed in Prior-Year
.note
The deduction for PTE tax claimed data shares from an 1120S-RI return to the
RIAdj
screen as Code 24. Amounts manually entered on the RIAdj
screen for Code 24 will override data shared amounts. The PTE tax deduction amount doesn't data share from Partnerships or trusts/estate.South Carolina
South Carolina allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Enter the total from all wanted SC-K-1 forms in the
Amount taxed at entity level - SC K-1's
field on Screen SCI335
. The amount is reported on line 6 of Form I335, which is subtracted from the income on line 5. Utah
Utah allows partnerships and S corporations as well as trusts/estates to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
Enter the current year PTE amount from partnership or S corporation in the
Pass-through entity taxes (State return only)
field on the federal K1-4
screen.Enter the current year PTE amount from a trust or estate on the federal K1T-3 screen in the
Pass-through entity taxes (State return only)
field.Taxpayers can claim a Code AP credit on Form TC-40A, Part 4 for the taxes paid on their behalf by the pass-through entity. The PTE tax amount will also be reported as addition to income on Form TC-40A, Part 1.
note
This amount doesn't data share.
Virginia
Virginia allows partnerships, S corporations, and limited liability companies to pay state taxes on behalf of the individual partner, shareholder, or member on Virginia taxable income from the pass-through entity. Taxpayers claim a refundable Pass-Through Entity Elective Tax Credit on Schedule CR, Section 3, Part 6.
Enter the current year amount in the field
Pass-through entity taxes (State return only)
on federal Screen K1-4. This amount transfers to the Virginia Payments folder, K1 screen, in the Virginia pass-through entity taxes
field. Alternatively, the amount can be entered in the Pass-through entity elective tax payment (Force)
field on the Virginia CR screen. When using data share from S corporation and partnership Pass-Through Entity Elective Tax returns prepared in UltraTax CS, the pass-through entity tax will transfer to the federal K1-4 screen.
West Virginia
West Virginia allows partnerships and S corporations to pay state taxes on behalf of the individual partner, shareholder, or member on West Virginia taxable income from the pass-through entity. Taxpayers can then claim a non-refundable credit on the Tax Credit Recap Schedule.
Enter the current-year credit amount from Partnership or S Corporation on the federal
K1-4
screen in the Pass-through entity taxes paid (state only)
field.The federal screens need to be postal coded to West Virginia for amounts to transfer to the West Virginia product. Amounts entered in these fields are summed up and recorded on WV RECAP, Page 2, line
Elective Income Credit for tax paid by a pass through entity
.When using data share for partnerships and S corporations, the pass-through entity tax credit will transfer to the federal K1-4 screen.
Wisconsin
Wisconsin allows partnerships and S corporations to pay state taxes on behalf of the individual partner or shareholder attributable to income from the pass-through entity.
The 1065 and 1120 returns offer an option for the business entity to pay the tax, resulting in a subtraction from the 1040-WI via data share. Alternatively, you can select
Election made for entity level tax payment
on the federal K1-St
screen. This will be reflected on the Wisconsin WIK1
screen, and the subtraction will appear on the appropriate line of Schedule SB (line 46 for an S corporation or line 48 for a partnership). Other state credit entry
The PTE decreases the amount of tax paid shown on a nonresident/part-year (NR/PY) return, which requires the amount to be adjusted (forced) on the
STCR
screen of the resident state.Like any scenario where there is tax paid by a pass-through entity on behalf of an individual taxpayer (an example is a composite return), the user must enter the amount of tax paid manually on the
XXSTCr
screen in the state on which credit for taxes paid to other state will be claimed.So, in this example, $7,800 would transfer into an 1040-ID IDSTCr screen unit for CA. The user would then have to force that amount to $10,000 if they deemed that to be the amount on which to base the Other State Credit in Idaho.