California PTET

[LJHCPA]

I have a few California partnerships that have participated in and paid the 2021 estimated PTET payments. I am having trouble getting the respective partner's share of those payments to appear on their 2021 K-1's.

I'm assuming their share of the PTET payment is supposed to appear on their CA Sch K-1, but I don't see it anywhere. I have completed the Form 3804 and 592 PTE worksheets and they populate with the partner's names and SSNs, but nothing appears on the K-1.

Page 1 of the 565 has a place to enter the actual payment made, so the entity is getting credit for their payment, but I can't get it to pass-through to the partners.

How do I assure the partners get their credit on their CA 540's?

[LJHCPA]

Let me clarify that I'm trying to get a 2021 estimated PTET payment reflected on the individual's 2021 K-1's. The Form 592 PTE appears it may be for 2022 estimated PTET payments, and I have populated that form with the 2022 estimated payment we made on 6/15/22. I don't expect that payment to appear on the 2021 565, nor do I expect ProSeries to make that payment for me as I already did that via the FTB web site. Do I even need to bother with completing the 592 PTE at all?

I've tried completing a regular Form 592, but even that puts nothing on the respective K-1's. I haven't yet completed their individual returns as they all have multiple K-1's from other partnerships which haven't been received yet. On the few K-1's I received for other entities paying the PTET they reflect the PTET payment on line 15(f) of the CA K-1, but I can't get ProSeries to do the same. How to fix?

[joshuabarksatlcs]

For LLC, CA Form 568, the partner's share is on Line 15f Credit - Other Credits.

Lacerte prints a supplemental info for the line

Pass-Through Entity Elective Tax Credit (FTB 3804) 

[LJHCPA]

 I am using ProSeries, and the tax return is Form 565 not 568. It is a limited partnership. I have completed the 3804 and it has all the correct calculations, they just will not appear on the respective K-1's anywhere. There is one partner who does not qualify for the PTET as it is an LLC (not a single member), so its share of the net income and PTET is not included in the 3804.

I've double-checked both the federal and CA information sheets looking for obscure check boxes and find nothing other than the 592, 592PTE and 3804 activation check boxes. I've determined I don't need the 592 or 592PTE as those are for 2022 estimated payments and withholding. So I'm stumped...can't get PS to populate the CA K-1's. If I use an over ride on line 15(f) will that prevent E-filing?

[LJHCPA]

Just a follow-up to my earlier message. I contacted ProSeries Support today and the contact agent forwarded a sanitized copy of the respective tax return to the programming staff. The programmers apparently cannot understand the problem so they cannot provide a solution.

I'm trying to simplify this as much as possible, but maybe the communication problem is on my end?

I see the problem as ProSeries does not auto populate Schedules K-1 of Form 565 for the CA PTET tax payments, despite the data being correctly calculated on FTB 3804 with the activation checkbox checked. The amount of the PTET tax paid on behalf of each qualifying partner should be reflected automatically on Sch K-1 line 15(f), but it is not--nothing appears anywhere on the CA Sch K-1. The only apparent solution is to enter a manual over ride for line 15(f)--obviously, not ideal.

The programmers seemed to want to focus on Forms 592 and 592PTE both of which are irrelevant because those forms deal with 2022 tax withholding and payments. I'm trying to get 2021 payments reflected on the 2021 Sch K-1. This is unacceptable for a program of ProSeries alleged stature.  Any comments?

[IntuitRebecca · Accepted solution]

Hi there,

ProSeries won't carry the credit for 2021 PTET paid from Form 3804 to the 565 Sch K automatically.  You have to enter the total credit first on the 565 Sch K, line 15f. Then use the special allocations column to allocate the amount of credit attributable to each partner. 

You can find detailed instructions here, under "To generate the K-1 credit": https://proconnect.intuit.com/support/en-us/help-article/state-taxes/california-pte-tax-proseries/L1...

- Rebecca

[LJHCPA]

THANK YOU!

This is certainly not an intuitive way to handle it, but it works! I don't know why the programmers (or product development or whatever they call themselves) couldn't explain that.

[mickey]

I have the same question too.  Form 3804 is not available.  Instead I see 3804-CR.  Is this the same thing?

On form 3804CR, column c (PTE elective tax credit(s) - is this the same as CA AB150 Program (paid in 2021) that appears on the K-1?

And where do you find the 592 PTE worksheet in Proseries Professional?  I'm working on the individual returns; My client received a K-1 Partnership from his employer.  I'm not working on the partnership tax returns - just want to clarify.

I think this question/answer relates to preparation of the Partnership returns...?

[mickey]

Are you all referring to entering the K-1 partnership onto a personal returns?  Or is about the preparation of form 1065 with the PTE?

[LJHCPA]

The original question was about preparing the 565. It seems to me ProSeries should automatically populate Schedule K-1, line 15f once you have completed Form FTB 3804, but it does not. The solution is to enter the total PTET paid for all partners on Schedule K of the 565 and use the special allocations function to get the individual Schedules K-1 line 15f populated.

[LJHCPA]

You have to go to the CA Information worksheet to check activation boxes for the 592, 592PTE and 3804. Once checked the worksheets for those respective forms are available. The Forms 592 and 592PTE seem to be for 2022 estimated tax payments. Since I made my 2021 PTET payments directly to the FTB on their web site the ProSeries forms 592 were not relevant to my situation, only the 3804 was relevant.

I don't know what the 3804CR is sorry. I only had to use the regular 3804.