How to enter New York PTE tax in ProConnect Tax

Table of contents:

To claim the credit on an individual return:

For Tax Year 2024

Beginning with Tax Year 2024, the input for the Pass-through entity tax Credit (IT-653) has changed. The credit information has been removed from the State & Local > Other Credits > NY Credit Forms screen and can be entered directly in the Passthrough K-1 screen. Follow the steps below to enter the credit information

• Go to Input Return > Income > Passthrough K-1s
• Select the appropriate K-1
• Go to State & Local > New York (Partner, Shareholder, Beneficiary) Share of Credits and Adjustments
• In the Additions section, select Number EA-219 for the state addback and Number EA-222 for the city addback
• Enter the Total Amount and the New State Allocated Amount for each entry

For Tax Years 2023 and 2022

1. On the left-side menu, select State & Local.
2. Click on Other Credits.
3. Select the NY Credit Forms screen.
4. Scroll down to the Pass-through Entity Tax Credit (IT-653) section at the bottom of this screen.
5. Enter the following information in the table provided:
   • Name of Entity
   • Employer ID number
   • PTET credit amount

The PTE credit will flow to form IT-201, line 71, as a refundable credit. The program will automatically add-back the credit amount on form IT-225, code 219.

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To indicate PTE was paid on a partnership return:

1. On the left-side menu, select Schedule K-1.
2. Click on the Schedule K-1 Miscellaneous screen.
3. After selecting the partner, scroll down to the New York Information section.
4. Check the box labeled Elect to pay the pass-through entity tax (PTET) for the current year.
5. Enter a 1 0r 2 in Residency status assigned for purposes of computing PTE taxable income: 1 = resident, 2 = nonresident.
6. Repeat these steps for each applicable partner.
7. On the left-side menu, select State & Local.
8. Click on Credits.
9. Select the NY State Credits screen.
10. Scroll down to the Other Credit Bases section.
11. Enter the total PTET paid for all partners in NY State pass-through entity tax (PTET) credit.

The PTET will print on form IT-204, lines 144a-f, with code 653.

To allocate the credit to specific partners:

1. From along the top of the workspace, select the Special Allocations tab.
2. In the upper-left corner, use the drop-down menu to select NY.
3. Under Amounts to Allocate, select NY State PTET paid.
4. Allocate appropriate credit amount to each partner.

The partners' credits will flow to IT-204-IP, lines 47a-47f, with code 653.

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For S-corporate returns:

Unlike partnerships, the CT-34 and CT-34-SH don't have a specific question or line where you can indicate PTET.

However, the form instructions state that you must provide a statement to each shareholder listing their pro rata share of:

• pass-through entity taxable income, and
• direct share of PTET credit.

To generate statements with the required information:

1. On the left-side menu, select State & Local.
2. Click on Schedule K.
3. Select the NY Schedule K screen.
4. Scroll down to the Pass-Through Entity Tax (PTET) section.
5. Enter the totals for all shareholders in New York State PTET credit and Income.

ProConnect Tax will use the shareholders' stock ownership to calculate their pro rata share of PTE taxable income and credit, which prints in part 2 of the New York Shareholder Summary. If you need to adjust these amounts:

1. On the left-side menu, select State & Local.
2. Click on Schedule K-1.
3. Select the NY Schedule K-1 Overrides screen.
4. Scroll down to the Pass-Through Entity Tax (PTET) section.
5. Enter this shareholder's portion of New York State PTET credit and Income.
6. Repeat these steps for each shareholder.

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For Fiduciary returns:

1. From the Input Return tab, go to State ⮕ Other Credits ⮕ NY Other Credits.
2. Under the Refundable Credits section, fill out the fields in the Pass-through entity tax credit (IT-653) subsection, adding rows as needed:
   • Name of entity
   • Employer ID number
   • PTE credit amount
   • PTET NYC credit amount

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