This article will help you report the Ohio elective pass-through entity tax (sometimes called PTE, PTET, or SALT workaround) and the resulting credit in ProSeries.
Table of contents:
|‣ To claim the credit on the 1040 return:
|‣ To generate PTE on a 1065 or 1120S:
|‣ Additional information
To claim the credit on an individual return:
- Open the Ohio Individual return.
- Open the Schedule of Credits.
- Scroll down to the Pass-Through Entity or Trust that Field and Paid Ohio Tax on Ohio IT 4708 or Ohio IT 1140 Smart Worksheet.
- Enter the business information and the OH Tax Paid on Your Behalf.
- The credit will flow to the IT1040 line 16.
How to generate the OH Form IT-4708 or IT-1140, or both:
- Open the Federal 1065 or Federal 1120S.
- Open the Ohio Business Return.
- On the Ohio Pass-Through Entity Information Worksheet scroll down to Part II.
- Under Ohio State Return select the type of return you need to file.
- Go to the Schedule IT- K-1 and check the IT 1140, IT 4708, IT 4738 boxes as needed for each member.
Per the OH Form IT-1140 instructions:
"Qualifying pass-through entities whose equity investors are limited to nonresident individuals, nonresident estates and nonresident trusts can file either Ohio forms IT 1140 or IT 4708. All other qualifying pass-through entities must file Ohio form IT 1140 and may also choose to file Ohio form IT 4708."
Therefore the partnership can choose which form to file, IT 1140, IT 4708, or both.
Per the OH Form IT-4708 instructions:
"If an investor participates in the filing of this form, then for Ohio form IT 1140 purposes for the taxable year the investor is not a "qualifying investor". So, for that taxable year the pass-through entity is not subject to the withholding tax or the entity tax (Ohio form IT 1140) with respect to the distributive share of income passing through from the pass-through entity to each investor participating in the filing of this form."
This means that if the entity is filing the IT 4708, they do not have to compute tax on the IT 1140. The program will only complete the last page of the IT 1140 that lists the partners.