How to enter Kentucky PTE in Lacerte

Starting in tax year 2022:

• Starting in March 2023, pass-through entities can elect to pay it's tax liabilities on behalf of it's individual partners, members, or shareholders for tax years beginning on or after January 1, 2022. This was retroactive for tax year 2022 returns.
• For taxable years beginning on or after January 1, 2023, an authorized person must file Form 740-PTET to make the election.
• For additional information, see the department's FAQ's.

Down below we'll go over how to enter PTE for Kentucky on Individual, Partnership, and S-Corporate returns in Lacerte.

Select your tax type:

Individual

1. Go to Screen 20, Passthrough K-1's.
2. Select the K-1 that needs the PTET-CR information entered.
3. From the sections select (EF ONLY) Kentucky Form PTE-WH (Form 740-NP only)/Form PTET-CR
4. Check the Form PTET-CR checkbox.
5. Complete the following fields if applicable:
   • KY LLET account number.
   • Distributive share amount of income subject to withholding.
   • Tax before credit amount.
   • Distributive share of credits amount.
   • KY taxes withheld/paid by entity
6. Go to Screen 53, State & Local - Other Credits.
7. Select Kentucky Schedule ITC.
8. From the Sections select Kentucky Refundable Credits.
9. Enter any Refundable pass-through entity tax credits from Form PTET-CR.

Back to Table of Contents

Partnership

The KY Form PTE will generate automatically but tax will not be calculated on it until the election is made. If the Partnership would like to Elect to pay income tax at the entity level and generate the Form 740-PTEP:

1. Go to Screen 40, Adjustments and select Kentucky from the state list.
2. From the Sections list select KY NR Income Tax Withholding on Net Distributed Share Income Report (Form 740NP-WH)/KY.
3. Check the box Election to pay income tax at the entity level (triggers the 740-PTET).
4. This will suppress the Form 740NP-WH and generate the 740-PTET.
5. The PTET-CR will generate for each Partner showing the Kentucky income tax paid by the entity.

Additional information may be needed on Screen 40, Kentucky Adjustments in the KY NR Income Tax Withholding on Net Distributed Share Income Report (Form 740NP-WH)/KY section for amended returns, estimated tax payments, and overpayment crediting options.

In the event that the partnership receives a credit on a K-1, go to the Screen 23, Passthrough K-1's, and under Kentucky Credits use the Kentucky LLET Pass-Through Items section.

Back to Table of Contents

S-Corporation

The KY Form PTE will generate automatically but tax will not be calculated on it until the election is made. If the S Corporation would like to Elect to pay income tax at the entity level and generate the Form 740-PTEP:

1. Go to Screen 44, Adjustments and select Kentucky from the state list.
2. From the Sections list select Kentucky Form 740NP-WH/Form 740-PTET.
3. Check the box Election to pay income tax at the entity level (triggers the 740-PTET).
4. This will suppress the Form 740NP-WH and generate the 740-PTET.
5. The PTET-CR will generate for each shareholder showing the Kentucky income tax paid by the entity.

Additional information may be needed on Screen 44, Kentucky Adjustments in the Kentucky Form 740NP-WH/Form 740-PTET section for amended returns, estimated tax payments, and overpayment crediting options.

In the event that the S Corporation receives a credit on a K-1, go to the Screen 24, Passthrough K-1's, and under Kentucky Credits use the Kentucky LLET Pass-Through Items section.

Back to Table of Contents