MD PTE when filing an amendment

[bryce]

I have a client who received the ERC. I'm filing an amendment to reduce his wages in the year the ERC related to (he received the $ in 2023 but ERC relates to 2021).  I've updated the 1120S.  He resides in MD where there is a pass through entity tax (PTE) at the entity level.  He has a balance due on the amendment given the reduction in the expense. Assuming he pays it in 2023, will he receive a federal expense for 2023 and also receive a dollar for dollar credit for taxes paid in the 2023 MD return?

I'm mostly just confused on when/how he'll get credit for this additional payment.

Any help is appreciated. Thanks!

Bryce

[sjrcpa · Accepted solution]

You now get to amend the 2021 individual MD return. He gets the credit for the additional 2021 MD PTET on this 2021 return.

[bryce]

Ah, that makes sense. Duh. Thanks for the help. 

[TSBCTA]

The deduction on the federal return is cash basis (regardless of their accounting method) - so yes the federal deduction will happen in 2023..  If you are amending the 1120S for the wages, the 511 should also be amended which will affect the PTE tax.  That of course flows through to the MD return and associated credit and add back on the 502CR and 502 additions as well.