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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 is 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 had not 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 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 current year amount from partnership or S corporation in the field Pass-through entity taxes (State return only) on federal screen K1-4.
The amount of tax paid from screen K1-4 will be reported on Schedule CP, Composite Payments/Electing PTE Credits. Detailed data entry for Schedule CP can be done on screen ALAdj2.
Arizona allows partnerships, S Corps and Trusts to pay Arizona taxes on behalf of the individual partner or shareholder attributable to income from the pass-thru entity. Taxpayers are then allowed to claim a credit on Form AZ140 for the taxes paid on their behalf by the pass-through entity.
Use Screen AZCr to enter the amount for Pass-Through Entity Tax Credit. This amount DATASHARES.
Use Screen AZAdj to enter the amount for Pass-Through Entity Tax Credit. This amount DATASHARES.
Arkansas allows partnerships, S corporations, and limited liability companies 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 Pass-Through Entity adjustment for exempt income on Form AR-OI (alternately, an Pass-Through Entity adjustment can be taken for exempt losses distributed by an electing PTE which will be reported as an addition on Form AR-OI). Enter the current year amount in the Pass-Through Entity adjustment field on the Arkansas Screen Adj.
When using data share from S Corporations and Partnership returns prepared in UltraTax CS, the pass-through entity income/loss will transfer to state Screen Adj.
California 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 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 Screen K1 for the California credit amount, or use the multi-state allocation spreadsheet to enter the California amount.
Enter the current year amount from Trust/Estate on the federal K1T-3 screen in the field for Pass-through entity taxes (State return only) or the California CAK1T-3 screen in the field for Pass-Through Entity Elective Tax Credit. If entering at the federal level, use CA postal code on Screen K1T for the California credit amount, or use the multi-state allocation spreadsheet to enter the California amount.
Carryover from 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 above, 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 datashare, 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 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 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 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 12.
An addition is also recorded on CO Form DR 0104 Page 1, Line 2. If the addition is not the same as what is reported on the K-1 for the credit amount, a force field is available on the CO Adj Screen State tax addback from electing pass-through entity (Force). This amount will update the calculated value (the credit amount from federal K-1 Screens) on the CO State Income Tax Deduction Addback Worksheet, line h. An amount entered in this Force field on CO Adj Screen will only affect what is reported on State Income Tax Deduction Addback Worksheet Line h and be included in the amount that flows from the worksheet to Form CO DR 0140 line 2; the Form DR 0104CR Line 12 will always only use the amounts entered on the federal screens in the Pass-through entity taxes paid (state only) fields. Qualified Business Income Deduction addback relating to the SALT Parity election is entered on Screen CO Adj in the Qualified business income deduction addback field.
When using datashare for partnerships and S corporations the pass-through entity tax will transfer to federal Screen K1-4.
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 datashare for partnerships and S corporations the pass-through entity tax will transfer to federal Screen K1-4.
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 datashare for partnerships and S corporations the pass-through entity income/loss will be automatically added in the Pass-through entity adjustments field. Only non-datashared pass-through entities need to be entered on the statement dialog.
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 does not datashare.
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 datashare 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 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 in state withholding reported on IT-40/Schedule 5, line 1 or IT-40PNR/Schedule F, line 1.
- 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 screen K1-4 (or in the multi-state allocation spreadsheet) in the field for Pass-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 screen K1T-3 (or in the multi-state allocation spreadsheet) in the field for Pass-through entity taxes (State return only).
A Not Required Statement is generated for Line 1 showing the amount attributable to PTE refundable credit and the amount attributable to state withholding.
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 do not affect the calculations of the Indiana return. The amounts for state withholding and PTE refundable credit are combined into a single amount for purposes of reporting state tax withheld in the Schedule IN-K1 record in the electronic file.
Federal Return Considerations – Distinguishing Between Refundable Credit amount and Withholding Amount
The Indiana Department of Revenue has instructed software vendors to include (combine) the PTE refundable credit amount with state tax withholding reported on Schedule IN K-1 and on Form IT-40, Schedule 5 / Form IT-40PNR, Schedule F, line 1. However, calculated amounts for the Indiana individual return distinguish between the PTE refundable credit amount (entered in the field for Pass-through entity taxes on federal Screen K1-4 or K1T-3) and the regular K-1 withholding amount (entered in the fields for state income tax withheld on federal Screens K1-4 or K1T-2) . Although these amounts are reported together (combined) on the return, these amounts are tracked separately and treated differently for purposes of calculating taxable refund to report on next year’s Form 1040, Schedule 1 and/or the appropriate amount of state withholding to claim on federal 1040, Schedule A. It is important to review Schedule IN K-1 detail and enter amounts accordingly on 1040-US input screens in order for each amount to receive proper treatment.
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 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.
There is no data share for 1040-LA.
Enter the applicable adjustment on Louisiana screen LAAdj.
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 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 Screen MACr-1, in the Other Refundable Credits section, select Refundable credits. Enter "EX" for the Credit Code and leave the Certificate Number blank.
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.
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 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. If the addition is not what is reported on the K-1, there is a force field on the MI-Adj Screen Flow-through entity taxes paid (Force) that will only override/change the amount calculated for the amounts entered in these fields. Anything entered on MI-Adj in the Tax payments made by partnership, S corporation, trust or estate will not be affected by the amount entered in the force field.
When using datashare for partnerships and S corporations the pass-through entity tax will transfer to federal Screen K1-4.
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 applicable, this information reaches UltraTax/1040 via datashare from the business product. The amount on federal screen K1-4 transfers to field Amount of tax paid on state screen MSK1.
All electing pass-through entities' taxable income and amount of tax paid from screen MSK1 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.
Supporting documentation is required to be included 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 appropriate file.
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 field Pass-through entity taxes (State return only) on federal screen K1-4. This amount transfers to field Pass-through entity tax credit (SALT Parity Act Tax credit) on Missouri screen MOCr. In the event there are multiple entries on federal screen K1-4, the values accumulate, and the total amount is included in the appropriate taxpayer or spouse field.
Supporting documentation is required to be included 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 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 screen NJK1 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 screens NJEFKP or NJEFKS 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 two pieces to the taxpayer.
- The Schedule PTE-K-1 which 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 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 "Net income subject to the entity level tax" statement dialog.
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, if applicable, in the statement field on the New York Cr-6-3 screen.
Form IT-653, Pass-Through Entity Tax Credit, is provided as 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 datashare for S Corporation and Partnership, the New York Pass-Through Entity Elective Tax Credit transfers to federal K1-4 screen.
When using datashare for S Corporation and Partnership, the New York City Pass-Through Entity Elective Tax Credit transfers to New York screen K1.
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 datashare for S-corporations, the pass-through entity income/loss will be automatically added to screen NCAdj.
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 1040-US Screen K1-4 from Ohio IT-K-1 line 3.
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 1040-US Screen K1-2.
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 Screen ORPTE, input into Addition for tax deducted at federal level to create an addition with code 167 on Schedule OR-ASC or OR-ASC-NP. Input into 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 flow over.
Note: These amounts both datashare the same number from the federal input on screen K1-4, and allow the user (if they want) to input a different amount in either field if necessary.
Rhode Island 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 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 RI Income & Adjustments folder 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 datashares from an 1120S-RI return to the K1-4 screen. Amounts manually entered on the RIAdj screen for Code 10 will override datashared amounts. The PTE tax amount doesn't data share from Partnerships.
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. Please refer to Form RI-1040 instructions for more detail regarding PTE deduction.
On the RI Income & Adjustments screen, enter PTE tax deduction as Code 24 "Modifications decreasing adjusted gross income."
Note: The deduction for PTE tax claimed datashares from an 1120S-RI return to the RIAdj screen as Code 24. Amounts manually entered on the RIAdj screen for Code 24 will override datashared amounts. The PTE tax deduction amount doesn't data share from Partnerships.
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 applicable SC-K-1 forms in the Amount taxed at entity level - SC K-1's field on Screen SCI335. The amount will be reported on line 6 of Form I335, which is subtracted from the income on line 5.
Utah 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 Code AP credit on Form TC-40A, Part 4 for the 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. The amount will also be reported as addition to income on Form TC-40A, Part 1.
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 Virginia Payments folder, Screen K1, in the field Virginia pass-through entity taxes. Alternatively, the amount can be entered in the field Pass-through entity elective tax payment (Force) on Virginia Screen CR.
Taxpayers that claim a Pass-Through Entity Elective Tax Payment Credit on Schedule CR must add back the pro-rata share of any deduction for state and local income taxes paid by the qualifying pass-through entity. This amount can be entered on Virginia Screen VAAdj or VAPAdj using code 20 in the Other additions statement.
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 federal Screen K1-4, and the pass-through entity tax add back will transfer with addition code 20 to the Other additions statement in Virginia Screen VAAdj or VAPAdj. If a return has an existing amount entered with code 20, the data share amount is ignored and does not overwrite, or add to, an existing code 20 amount.
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 datashare. Alternatively, you can select Election made for entity level tax payment on federal Screen K1-St. This will be reflected on Wisconsin Screen WIK1, and the subtraction will appear on the applicable 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.
Example
Taxpayer is a California nonresident and an Idaho resident.
On the CA return, tax is $10,000. Tax is reduced by $2200 for the PTE Credit as $2200 of the tax was paid by the PTE.
Form 540NR calculates a net tax of $7800, which transfers into 1040-Idaho (Resident), Screen IDSTCr, unit for California.
But, the preparer’s position might be that the tax paid by the taxpayer to CA was $10,000, not $7800. $7800 was paid via the 540NR return; the other $2200 was paid by the Pass-thru Entity.
Like any scenario where there is tax paid by a pass-through entity on behalf of an individual taxpayer (one such example is composite return), the user must manually enter the amount of tax paid on Screen XXSTCr in the state on which credit for taxes paid to other state will be claimed.
So, in this example, $7800 would transfer into 1040-IN Screen IDSTCr unit for CA. The user would then have to force that amount to $10,000 if they deemed that to be the appropriate amount on which to base the Other State Credit in Idaho.
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