THE LOGISTICS: PAYING THE SALT WORKAROUND TAX
We previously sent you information about the details of the SALT cap work around, or Pass-Through Entity (PTET) on November 8, 2021. Here is a brief recap and a link to the full article:
- Only available to S Corporations and Partnerships whose owners consist solely of individuals, fiduciaries, trusts, estates or entities taxable as corporations.
- The tax rate will be 9.3% of the consenting partner’s pro rata share of income.
- Unused credits can be carried forward for 5 years.
- The election is annual, irrevocable, & can only be made on original timely filed returns.
The Franchise Tax Board has now published the PTE Elective Tax Payment Voucher (FTB 3893) on November 1, 2021. The voucher may be used by S corporations and partnerships to make a PTE elective tax payment by printing the voucher from FTB’s website and mailing it to them.(Click here for instruction)
As a taxpayer, you must make elective tax payments for the taxable year 2021 on or before the original due date and to get the benefit of the deduction for 2021, it needs to be paid before December 31, 2021.
For taxable years 2022 to 2025:
- If due on or before June 15th of the taxable year of the election.
For payment 1: Pay $1,000 or 50% of the elective tax paid in the prior taxable year, whichever is greater.
- On or before the due date of the original return without regard to extensions. For payment 2: Pay the remaining amount.
For further information, feel free to contact us at any time. The CAPATA team is always happy to help!