Maryland PTE K-1

Forum|Forum|4 years ago
August 18, 2021
1 reply
13 views

For a Maryland PTE operating solely in Maryland, and that made a Federally deductible estimated PTE tax payment in 2020, shouldn't Lines 1 and 2 of the K-1 be identical? ProSeries is reporting Line 2 as the Federal Income plus the tax deducted on the Federal return. On the 502, we are taking the Federal K-1 and adding back only the actual PTE tax calculated using the 502LU.

ProSeries Professional

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dascpa

Level 11

On the ProSeries 510/511 there is a Smart Worksheet where you have an adjustment to Federal income the PTE taxes paid and deducted on page 1 of 1065/1120S or on the 8825. Therefore the two numbers are different. For reference the MACPA hosted a 2-hour webinar with the Comptroller's office last week and replayed this past Tuesday. In it were slides explaining how this works.

And on the MD 502 individual you record on 502CR and on 502LU the taxes "calculated" as listed on the MD K-1. Previously this is where we "thought" we would add back the taxes "paid" but this has changed.

P

PLU4608CPAAuthor

Level 2

Thank you for the reply. I understand what you are saying and I saw the webinar. My question really only relates to the K-1. It seems misleading that Section A, Line 2 of the K-1 shows the Distributive pro rata share allocable to Maryland as the Federal income plus the addback of the tax deducted on the Federal return. To a shareholder, it would look as if the income to be reported on his 502 would be this higher number and not the Federal income. I could imagine some shareholder's accountants (not familiar with MD) taking this K-1, using the higher MD distributive income and then also adding back the actual tax (Section D Line 5 of the K-1).

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