How to enter California PTE credit in Lacerte
by Intuit•3• Updated 4 months ago
California A.B. 150, also known as the Pass-Through Entity Elective tax, allows state tax on passthrough income to be paid at the entity level at a flat rate of 9.3%. The law is effective for tax years beginning on or after January 1, 2021, and before January 1, 2026.
This article will help you report the California elective pass-through entity tax (sometimes called PTE, PTET, or SALT workaround) and the resulting credit.
For business filers:
- See California PTE tax in a partnership for 565 and 568 returns, or
- See California PTE tax in a 100S for S corporations
For individual filers:
Follow these steps to enter a PTE tax credit received on a partnership K-1:
- Go to Screen 20.1, Partnership Information.
- Scroll down to Line 15 - Credits and Withholding.
- Enter the 15f amount in Credit from passthrough elective entity tax (PTE) {CA}.
Follow these steps to enter a PTE tax credit received on an S-corporation K-1:
- Go to Screen 20.2, S Corporation Information.
- Scroll down to Line 13 - Credits and Withholding.
- Enter the 13d amount in Credit from passthrough elective entity tax (PTE) {CA}.
The PTE elective tax credit will flow to Form 3804-CR. This is a nonrefundable credit. Any credit disallowed based on these provisions will carryover to future returns.
Follow these steps to enter a PTE tax credit received on a Fiduciary K-1:
Check the California Franchise Tax Board (FTB) for help with pass-through entity (PTE) elective tax.
For Fiduciary 541 returns:
Steps to enter a PTE tax credit that has been received:
- Go to Screen 57.011 - California Other State Credits.
- Scroll down to Pass-Through Entity Elective Tax Credit (3804-CR).
- Hold down Ctrl+E in the Passthrough entity elective tax (PTE) credit (Ctrl+E) field.
- Complete the PTE Name and FEIN columns.
- In PTE Tax Credit(s) column, enter the amount of the PTE Tax Credit (15f amount from the partnership K-1 or the 13d amount from the S corporation k-1).
The credit appears on California Form 3804-CR Pass-Through Entity Elective Tax Credit or as a Page 2 Statement for California K-1 (541) Line 13D - Other Credits.
Steps to change the K-1 Distribution Option for Credits:
- From the Settings menu choose Options.
- Select the Tax Return tab.
- Scroll down to K-1 Distribution Options.
- From the Credits dropdown menu select the desired global option for your returns (Maintain in Fiduciary or Prorate between Beneficiary/Fiduciary).
- Click OK to save the change.
Steps to override the K-1 Distribution Option for Credits for the specific return:
- Go to Screen 9, Schedule K-1 Distribution Options.
- Enter the desired option in Credits: 1=in fiduciary, 2=prorate to beneficiary [O]
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