Pass – Through Entity Tax 2023
The Tax Cuts and Jobs Act set a $10,000 restriction on the amount of state and local tax (“SALT”) that a person (or the owner of a pass-through entity) may deduct from federal income tax. However, some states have established several laws to counteract the effects of this limitation.
Since the TCJA SALT deduction limitation, 30 states (and one locality) have passed PTE taxes for February 2023. In addition, another five states (Hawaii, Iowa, Kentucky, Vermont, and West Virginia) have PTE tax laws that have been introduced.
In this article, we have shared the due dates and the election requirements. Although few states require separate election filing, and returns, extensions, and estimates accompany few, the organization must be vigilant about election due dates. The entity will lose the benefit if it fails to file a PTE return by the deadline.