The Montana Department of Revenue (DOR) issued a news release on June 12, 2023 providing guidance on the recently enacted pass-through entity tax (PTET) election. Senate Bill 554 created the new elective 6.75% tax for partnerships and S corporations. The election is made annually by the entity on its return and is available beginning with tax year 2023.
Electing pass-through entities are required to make estimated payments quarterly. For tax year 2023, the payments are due: June 15, 2023; September 15, 2023; and January 16, 2024. The payments should be made in equal installments. If the electing entity has already made an estimated payment, that payment will be applied toward the entity’s PTET liability.
The Montana DOR notes that it will not transfer estimated tax payments between the account of an owner and the account of a pass-through entity. Owners of an electing entity should adjust their own estimated tax payments as a result.
Estimated payments can be made electronically through a TransAction Portal (TAP) account or with the electing entity’s FEIN (federal employer identification number).
Interest & Penalties
Interest on the underpayment of estimated taxes will not be assessed for the first year in which an entity elects to pay the PTET. Interest on the underpayment of estimated taxes will remain to be assessed on the owner’s individual estimated taxes.
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