PTE Tax refund on Form 100S

[tmo1]

Im hoping someone can give me some feedback. I have a single shareholder that paid their estimated PTE tax last year so its reflected as a payment on this years for 100S. The tax payer ended up having less profit and so the PTE was over paid. The issue is the form 100S is generating a refund for the PTE tax and its my understanding the PTE tax is really you prepaying your state taxes ultimately reflected on the personal 540 (CA) return. So why and is this an error that the 100S for is trying to refund the overpaid PTE tax? Their personal return has far more income so they will actually need the full PTE tax paid to help offset their CA income tax liability at the personal level. Any insight/education would be greatly appreciated.

[tmo1 · Accepted solution]

I found the answer to my own question - in case anyone else needs it

If the entity overpaid the tax, the overpayment will be applied to other liabilities or refunded to the entity after a tax return is filed.

No entities are able to carry forward an overpayment and designate it specifically or solely to the June 15 prepayment or PTE elective tax for future years. PTE elective tax paid can be carried forward and applied to other tax liabilities, with the excess refunded to the taxpayer. The 565 partnership return does not allow an overpayment to be applied to the following taxable year because these entities’ liability is typically limited to the $800 minimum tax, and these entities do not have other liabilities to apply overpayments to. For these entities, overpayments of PTE elective tax will be refunded to the entity.

For all entities, if the entity overpaid the PTE elective tax, the overpayment will be applied to other liabilities (if any) or refunded to the entity after a tax return is filed.