Can anyone help?  @sjrcpa ?

Thank you!

Thanks for the response!  Edit:

Option 1.  It doesn't get added back to MD so I made an override in screen 38.271 .  That somehow changes the percentage of ownership on line 5a of Form 511 (I guess that's based on federal income), so I overrode the percentage of ownership as well.

Option 2.  Use the regular deductions screen (Screen 13).  Under 'Taxes' enter MD PTE taxes as a state tax and then subtract it in other taxes with a -1 in 'State if different'.

I ended up going with option 1.  Option 2 incorrectly uses the higher income amount (net income + MD tax addback) on lines 1 and 2 of Section A of the K-1.  Option A only does that to line 2.

UPDATE: Each override causes other issues in the return.  I did try the 'State and local taxes deducted [A]' box in screen 40.  Higher MD income still ends up on the K-1s.  And the K-1 overrides simply don't override.

Lacerte support has no idea what they are talking about.  This may not be an update to many of you.

MD K-1 income should be higher than federal K-1 income. MD does not allow the deduction for PTET.

Yes, MD income on the 511 is higher and that's used to calculate the PTE tax.

But the higher MD income should not be reported on the MD K-1.   The MD K-1 uses the lower federal income because the shareholder or partner is taxed based on federal income (with a PTE credit addback, which doesn't necessarily line up with the deduction taken on the PTE tax return).

From the MD K-1 510/511 instructions for Section A: "Enter federal distributive or pro rata share of income from federal Schedule K-1"