The passage of the 2017 Tax Cuts and Jobs Act (TCJA) limited the state and local tax (SALT) deduction individuals can take on their personal returns to $10,000 for tax years beginning after December 31, 2017 and before January 1, 2026. As a workaround to this SALT cap, many states have enacted legislation that allows PTEs the option to elect to pay taxes at the entity level. This election, commonly referred to as the PTE tax election, shifts the tax burden from the individual to the entity while allowing a full deduction of state taxes at the federal level.
Submit the form below to download a chart that shows which states have enacted legislation or not, the tax year the election becomes effective, and the manner in which the election is to be made.
The rules, regulations, and additional tax implications regarding PTE elections are complex and vary state to state. Please consult a State and Local Tax professional at FORVIS for more information and assistance.