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How to enter New Mexico PTE in ProConnect Tax

SOLVEDby IntuitUpdated 1 month ago

This article will help you report the New Mexico elective pass-through entity tax (sometimes called PTE, PTET, or SALT workaround) and the resulting credit in ProConnect Tax.

Select your tax type:

IndividualPartnershipCorporateFiduciaryTax year 2022

What's new for tax year 2023?

  • Starting with tax year 2023, pass-through withholding will no longer be reported on the RPD-41367, PTW-D Pass-through Entity Withholding Detail Report. This form has been retired. Withholding tax from distributions to owners is now reported directly on the Form PTE on schedule PTE-D, Detail of Owner Withholding, Composite Tax and Entity-level tax.
  • In addition, a separate section of the tax return has been created for those electing to file entity-level tax. House Bill 368 passed in the 2023 regular session created new provisions for the determination of net income for an entity electing to file entity-level tax. This amount is calculated in a different manner than net income for withholding.

How to generate PTE in tax year 2023:

Individual

  1. Go to Input Return State & Local Modifications NM Modifications.
  2. Under the New Mexico Additions section enter the Tax paid by a Pass-Through-Entity on distributed net income.
    • This amount flows to PIT-ADJ, line 5.

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Partnership

To activate the PTE calculation:

  1. Go to Input Return Miscellaneous Information NM New Mexico Miscellaneous Information.
  2. Check the Elect to file and pay entity-level tax checkbox.
  3. The Entity Level Tax will now show on the NM PTE Page 2, line 29.
  4. Each partners potion will show on the Ptr. Summary line 3 and the RPD-41359.

To mark a partner as not subject to Entity-Level Tax:

  1. Go to Input Return Partner Information
  2. Select the tab for the partner that is not subject to Entity-Level Tax.
  3. Scroll down to New Mexico Information.
  4. Check the Not Subject to Entity-Level Tax checkbox.
  5. This will suppress the Ptr Summary line 3 and RPD-41359.

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S-Corporation

To activate the PTE calculation:

  1. Go to Input Return State & Local Miscellaneous New Mexico Miscellaneous Information.
  2. Check the Elect to file and pay entity-level tax checkbox.
  3. The Entity Level Tax will now show on the NM S-Corp-1, Page 2, line 27.
  4. Each shareholders potion will show on the S/H Smry at the top and RPD-41359.

To mark a shareholder as not subject to Entity-Level Tax:

  1. Go to Input Return Shareholder Information
  2. Select the tab for the shareholder that is not subject to Entity-Level Tax.
  3. Scroll down to New Mexico Information.
  4. Check the Not Subject to Entity-Level Tax checkbox.
  5. This will suppress the S/H Smry Entity Level Tax and RPD-41359.

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Fiduciary

To activate the PTE calculation:

  1. Go to Input Return Miscellaneous Information.
  2. Select the NM tab.
  3. Check the Elect to file and pay entity-level tax checkbox.
  4. The Entity Level Tax will now show on the Fid-1 line, page 2, line 26.
  5. Each beneficiary potion will show on the Bene Info on line 6 and RPD-41359.

To mark a beneficiary as not subject to Entity-Level Tax:

  1. Go to Input Return Beneficary/Grantor Info Beneficiary / Grantor Information.
  2. Select the tab for the beneficiary that is not subject to Entity-Level Tax.
  3. Scroll down to New Mexico Information.
  4. Check the Not Subject to Entity-Level Tax checkbox.
  5. This will suppress the Bene Info on line 6 and RPD-41359.

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What's new for tax year 2022?

  • Pass-through entities doing business in the state must file a New Mexico Information Return for Pass-Through Entities (Form PTE).
    • This requirement includes entities registered to do business in the state, transacting business in, into or from the state, or receiving any income from property or employment within the state, and includes any partnership, joint venture, common trust fund, limited association, pool or working agreement, limited liability company or any other combination of persons or interests required to file a federal partnership return.

Down below we'll go over how to enter PTE for New Mexico on Individual, Partnership, S Corporate and Fiduciary returns in ProConnect Tax.

Individual

  1. From the Input Return tab, go to State & Local Modifications NM Modifications.
  2. Under the New Mexico Subtractions section, enter the amount in the Exemption for net income subject to the entity level tax field.
    • This amount flows to PIT-ADJ, line 25.

Partnership

Residents

The RPD-41367 and Ptr. Summary generate automatically for resident partners, and flows to line 12 of RPD-41367.

Nonresidents

From the Input Return tab, go to Partner Information and under the New Mexico Information section, check the Entity Level Tax box. This will generate the RPD-41337 and Ptr. Summary.

S-Corporation

From the Input Return tab, go to Shareholder Information and under the New Mexico Information section, check the Entity Level Tax box. This will generate the RPD-41367 and populate line 12 of Schedule A, page 2.

Fiduciary

From the Input Return tab, go to Beneficiary/Grantor Information and under the New Mexico Information section, check the Entity Level Tax box. This will flow the beneficiary's share to line 12 of FID-D, page 2.

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