How to Enter Illinois Pass-Through Entity Tax

[troy]

Illinois recently passed legislation that allows a taxpayer to deduct a percentage of Illinois taxes, known as the pass-through entity tax, on the federal return (1120-S in this instance).

However, from what I understand, this amount cannot be deducted on the IL-1120ST state return.

How should this tax be entered in ProSeries to ensure it flows properly?

https://www.mwe.com/insights/illinois-enacts-pass-through-entity-tax-to-help-partners-and-s-corporat...

https://tax.illinois.gov/research/taxinformation/income/partnership.html#:~:text=Pass%2Dthrough%20en....

[IRonMaN]

I'm guessing there is either a form in the software to specifically add back the tax or some type of IL K-1 adjustments showing the amount needed to be added back by the shareholder.

[garman22]

I agree w @IRonMaN. I dont use PS for my business needs but on Il-K-1P there is a line for the pass through, if you dbl click it, will it take you to the entry line? 

OR maybe its on the federal side and putting a specific code will transfer it correctly. 

[dascpa]

In Maryland (we were the first state to pass the PTE law and get it approved by the IRS) on the entity tax return nothing appears differently on the Fed return (it's included on the tax expense line). On the MD return there is a line that reports the PTE tax paid.  This line flow through to the MD K-1.  Then on the individual MD tax return we have (1) an addback line (we start with Fed income and PTE tax is not deductible at the state level) and then a credit form to report the PTE tax as a credit.  Bottom line - Fed deduction, MD addback of that deduction, then MD credit to get the benefit.

[IntuitMark304]

Troy,

Take a look at the instructions for the IL1120-ST.  As an Intuit employee, I cannot provide you with specific tax advice. But I think if you review the instructions for Step 4, line 16 it may help you with the addback of the PTE tax on Illinois that was previously deducted federally.  Attaching an excerpt of the instructions to this post.