SMLLC's do NOT qualify! This is Deloitte's guidance.
Qualified taxpayer excludes disregarded entities:While having a disregarded entity as a partner or member does not disqualify a pass-through from qualified entity status and making the CA PET election, a business entity that is disregarded is not eligible to receive CA PET credit. Entities that are disregarded under California Revenue and Taxation Code 23038 are considered disregarded for purposes of eligible taxpayer status; however,the FTB has confirmed that grantor trusts could be qualified taxpayers.
Is the question referring to an SMLLC that is a member of a partnership?
