Colorado SALT Parity Act Election Running Short on Performance Standards- Incomplete

[DaveGossettCPA]

I know its a little early in the season and I assume the ProSeries gurus in the tech engineering are wrestling with this issue. In 2022 The Colorado Legislature passed a new bill which the governor signed into law. Regarding the SALT Parity Act. With a new election whereas passthrough entities canCO SALT PARITY ACT pay the Colorado Income Tax at an entity level and avoid passing through the tax to their member/shareholders. BTW, the tax is only 4.4% instead of the 5% flat tax rate. I won't go into huge detail here, but it seems to me that the ProSeries version of this is running a bit short of the software performance we are used to. I am completing this for a partnership so my references are to the Colorado DR 0106 and associated forms. Appropriate changes should aslo be made for the Sub S version. 

Why dont you have a check the box election, so that it populates form DR 1705 SALT Parity Act Election Form automatically and completes the tax calculation for you on form 106 part III?

It should also automatically enter the SALT election income onto a line 7 Other Deductions, so it reduces the 'normal' taxable income passthrough. and of course, add appropriate notations to the Colorado k-1 forms.

All of this should be EASILY put into the electronic filing program. I know you have to work with CO-DOR on this but, they are no dummies. Please contact me if you have any questions. But please do a little research yourselves as to how you think this should work. 

Dave Gossett, CPA, CFP(r) (CPA since 1977)

[email address removed]

[david3]

Thanks, Dave for mentioning this.

The DR 0106EP forms (estimated tax payment forms) still needs to be added as well as the letter updated to include the estimated tax payment narrative.