How to enter California PTE credit in Lacerte

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.

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:

1. Go to Screen 20.1, Partnership Information.
2. Scroll down to Line 15 - Credits and Withholding.
3. 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:

1. Go to Screen 20.2, S Corporation Information.
2. Scroll down to Line 13 - Credits and Withholding.
3. 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:

1. Go to Screen 57.011 - California Other State Credits.
2. Scroll down to Pass-Through Entity Elective Tax Credit (3804-CR).
3. Hold down Ctrl+E in the Passthrough entity elective tax (PTE) credit (Ctrl+E) field.
4. Complete the PTE Name and FEIN columns.
5. 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:

1. From the Settings menu choose Options.
2. Select the Tax Return tab.
3. Scroll down to K-1 Distribution Options.
4. From the Credits dropdown menu select the desired global option for your returns (Maintain in Fiduciary or Prorate between Beneficiary/Fiduciary).
5. Click OK to save the change.

Steps to override the K-1 Distribution Option for Credits for the specific return:

1. Go to Screen 9, Schedule K-1 Distribution Options.
2. Enter the desired option in Credits: 1=in fiduciary, 2=prorate to beneficiary [O]