LA CPA
Level 2

Where do you input California state tax payments for PTE Income in Lacerte? California passed AB 150, PTEs can now pay state taxes on their income (like a c corp) and it is business deduction on the federal return! On the CA k-1 you should receive a credit which is not refundable.  I dont see how to input into lacerte.

 

Thanks in advance. 

 

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sjrcpa
Level 15

You're trying to do this in the 2021 software?

I'd say it's not ready for prime time yet.

I don't think CA has figured out the nuts and bolts of it yet either - @George4Tacks@abctax55,

@Just-Lisa-Now- ?

The more I know, the more I don't know.
LA CPA
Level 2
sjrcpa
Level 15

I hope they stick to their timetable. Last year MD didn't release forms or guidance til around July, then pulled it back, then released new versions, etc. Then the software had to be updated/corrected. I don't think we could file a return with the PTE tax until September.

The more I know, the more I don't know.
abctax55
Level 15

@LA CPA 

I suggest you frequent the Spidell website, and sign up for their flash alerts (they are the gurus of all CA taxation).  Their message board has dozens of conversations/questions.

There is A LOT of uncertainty regarding this law, and the implementation of it.  AND whether it is truly a one size fits all is still to be determined; are you aware it doesn't offset CA's tentative minimum tax?

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rcordovacpa
Level 2

Re: CA AB-150: Will Lacerte automatically compute the 9.3% of net CA pass through income, or does the figure have to be manually input (with perhaps a diagnostic if the amount is not in accord with the proper percentage)?

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abctax55
Level 15

@rcordovacpa 

Probably.. maybe.

It's a bit difficult for Intuit to do the programming until the FTB responds to numerous unanswered questions. Please visit the (free) Spidell message board & read some of the AB 150 threads.

 

 

 

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rcordovacpa
Level 2

But once Lacerte perfects the programming for CA AB-150 will the software actually compute what the 9.3% withholding should be?

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George4Tacks
Level 15

To quote @abctax55 "Probably.. maybe."


Answers are easy. Questions are hard!
abctax55
Level 15

@rcordovacpa 

Only the programmers at Intuit can answer that.

*We* are just end-users of the software, like you.

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COGS
Level 3

Now that we have the 12/9 update, let's revisit the question.  I can see in the individual K-1 area "Credits And Witholding" you can put it in there.  In the Partnership and S Corp. Modules is there a place for it there yet?  If, that is not programed yet, do we have a way to mimic the way the AMT calc will work?  I have not really looked at this issue other than hearing that the AMT  issue for California is a very big issue.  So, jut putting it out there to see if there is a good way to punch through the impact of paying the tax at this point.

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bacajr
Level 1

I watched the Spidell seminar yesterday and they have the Schedule P completed. It shows the credit as code 999, but I could not replicate on my lacerte 2020 program. Any ideas?

 

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abctax55
Level 15

AB 150 is for 2021 returns.  There is no reason it *would* be in the 2020 software.

And 2021 software isn't 'ready for prime time' just yet; plus the FTB has yet to answer many, many questions regarding this new law.

I did hear of one suggestion to put the PET amount into any non-refundable credit category to possibly get an approximation for year end planning.

YMMV

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abctax55
Level 15

@COGS 

See my answer above re: a possible work around.

And technically, it is TMT (tentative minimum tax) not AMT.

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bacajr
Level 1

I attended the Spidell webinar the other day and they used a 2020 program to generate the credit. I have reached out to Spidell to confirm use of a 2020 software that generated the Schedule P, with code 999. 

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bacajr
Level 1

PTET is a non refundable credit, so it was appropriate to place it in that particular section. 

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COGS
Level 3

Well, I have been playing around putting in the credit.  The only client that did not get the full benefit and therefore generates a credit carry forward had a CA NOL carryforward that we could not carry back like we did with the Fed.  The NOL totally offsets all CA income including the $ million dollar cap gain from a partnership property sale.  But for those with income, I have not encountered the tentative minimum issue.  But we can't see Schedule P and I don't really know if I need to do something else.  

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abctax55
Level 15

I *think* CA (again) suspended NOL's... you should double check.

edit... found this on Spidell's message board:

https://www.caltax.com/search-results/313099/3/12/

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bacajr
Level 1

Hi all. I've been playing with the 2020 version. It generates the credit for a majority of my clients with the general information worksheet showing a carryforward. 

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COGS
Level 3

I misspoke.  It is suspended passive losses.

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COGS
Level 3

We have been playing around in 2021.  What is interesting is we have a new client with about 20 K-1s and overall income of about 1.5 Million.  We dropped in the credit on the K-1 credit area and lowered the federal income by that amount.  It was not giving him most of this credit.  We had another client with just one K-1 and the income as about the same.  He got the full credit.  We called Lacerte and they said if you have a bunch of K-1s the program is really unstable and will not compute correctly. 

rcordovacpa
Level 2

I am curious - in your analysis of of the client with a large number of K-1's did you find that the CA Minimum Tax limited the PTE CA taxes withheld which could be used in 2021?

Also, did you find that Lacerte produced some manner of diagnostic related to AB-150?

 

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COGS
Level 3

What caused us to see that there was an error is that even though we can't see any state forms, we can see the CA worksheets.  In those there was a worksheet showing the adjustments that are the delta between fed and state K-1 income.  They were all showing largely zero federal income.  Interestingly, the tax summary pages look to have correct numbers. 

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George4Tacks
Level 15

I started to play with this today for California Partnership.

Screen 32.1 > CA Miscellaneous > Pass-Through Entity Elective Tax Calculation (Form 3804) > enter a 1 in the first box for each electing partner and Lacerte computes the 9.3%. That then shows up on the 565 line 25 and Line 15f (with note) of the K-1.

There does not seems to be an input for payment via 592-PTE, but you can enter a payment for the amount in Screen 37.011 near the bottom of CA Miscellaneous Info for form 3893[O] 

I believe all of this is a work in progress and input entry points may change. 


Answers are easy. Questions are hard!
CPATIM1
Level 2

On the individual module do you put the PTE CA tax withheld from a partnership on the K-1 input screen in the credit for state estimates/witholding paid on or before 12/31/21 for payments that were made in 2021?

Or is there a special box somewhere to just put PTE payments that I am missing?

Chuck56
Level 1

Screen 42 for S corps

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@George4Tacks  I have CA income of 78,505, however there is carry forward loss of 25,683, so the same is to be adjusted in  3804 Form, but in the form is showing income as 78,505, kindly let me know how to adjust the losses in 3804.

 

Kindly let me know

Thank you for help.

 

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George4Tacks
Level 15

@kanchan-textax-u see the response by @abctax55  on ‎12-10-2021 04:23 PM above


Answers are easy. Questions are hard!
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How can i go to the screens, how shall i know which is the screen 42

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@George4Tacks @Chuck56 @LA CPA 

 

Kindly let me know.

 

Hi Sir, Hope you are doing well.

One quick querry, I have one client who opted and paid taxes under AB 150. Ex- My ca tax owed is 7000, however I paid 20000, so how to deal with the excess PTE credit,

 

And how much deduction I can take on federal return on 7000 or 20000

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abctax55
Level 15

@kanchan-textax-u 

Are you using Lacerte or not?  Lacertians use screen numbers for reference.

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No i am using Proconnect.

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abctax55
Level 15

Proconnect is the umbrella of all Intuit software.

What are you actually using?  And are you a professional tax preparer?

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dbekkerman
Level 1

I wonder if the entering AB150 as the equal split between Q1-Q4 quarterly estimated payments (say to the state of California ... in my case) and set the resulting credit refund as rollover the credit to new year be a good resolution ? Since most of the time SALT limits to 10K and majority use standard deduction - should have no implications on Fed Return

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