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New York |
California |
Connecticut |
New Jersey |
NYC |
| What is effective date? |
1/1/2021 |
1/1/2021 |
1/1/2018 |
1/1/2020 |
1/1/2023 |
| How does it work? |
Make election. Need to make quarterly estimated tax payments equal to 90% of current year tax or 100% of prior year tax. |
For 2022 onward make 1st installment payment by June 15th of the taxable year (greater of $1,000 or 50% prior year tax). Second installment due March 15th of subsequent tax year |
Annual return due March 15th, installment payments due 4/15, 6/15, 9/15 & 1/15 of taxable year. Credit equals 87.5% of member’s pro rata share of tax paid post 1/1/2019 |
Credit for “distributive proceeds”, which means net income, dividends, royalties, interest, rents, guaranteed payments & gain of pass-through entity. Make estimated tax payments due 4/15, 6/15, 9/15 and 1/15. |
Make election by March 15, 2023. |
| What action steps are required before December 31, 2022? |
In order to get deduction for 2022, make an estimated tax payment before year-end. |
Make estimated tax payment by sending payment with FTB 3893. |
Make sure estimated tax payments for 2022 are up to date. |
Make sure estimated tax payments for 2022 are up to date. |
N/A for 2022 |
| How do I calculate my estimated tax payment? |
Tax is calculated on a graduated rates, similar to individual income taxes. Contact your CPA for assistance on computing the estimated tax. The rates begin at 6.85% and increase to a maximum of 10.9%. |
Pay 9.3% tax rate based on pro-rata income. |
Based on 90% of current year or 100% of prior year PE tax return. |
Use PTE-100 as a guide for calculating the amount of estimated tax due and use the Estimated Tax Worksheet on p.2 to calculate each installment. Rates increase gradually with higher income. |
N/A for 2022 |
| I don’t want to make estimated PTET payments in calendar year 2022 due to cash flow issues. If I make a payment in 2023, will I get a credit against 2022? |
Yes, late payment of tax will count as a credit. However, the deduction against income is only during the period of actual payment. |
Payment must be made before the original due date of the return of 3/15/23. However, we advise to pay before December 31 in order to receive a deduction in 2022. |
The last estimated tax payment is due 1/15/23. However, we advise to pay before December 31, 2022 in order to receive a deduction in 2022. |
The last estimated tax payment is due 1/15/23. However, we advise to pay before December 31, 2022 in order to receive a deduction in 2022. |
N/A for 2022 |
| My business missed the election for 2022. Is it too late to make the election? |
No, you have until September 15th to make the election |
Entities may make election on timely filed 2022 tax return due 3/15/23. |
Make the election on CT-1065 by the due date of 3/15/23. |
Can make an election for 2022 until due date of business return 3/15/23. |
N/A for 2022 |
| How does one make a payment? |
Online |
Make estimated tax payment by sending payment with FTB 3893. |
Pay online by visiting THIS PAGE |
Visit THIS PAGE to make an online payment through the NJ website. |
TBD |
| What are the action steps for 2022? |
Make quarterly estimated tax payments based upon 90% of 2022 income or 100% of 2021 income. Payments are due 3/15, 6/15, 9/15 and 12/15. If the electing entity did not make an election for 2021, the 2022 estimated tax is based upon 90% of 2021. |
Make initial estimated tax payment by June 15th of $1,000 or 50% of the elective tax paid in the prior taxable year, whichever is greater. |
Make estimated tax payments due 4/15, 6/15, 9/15 and 1/15. |
Make estimated tax payments due 4/15, 6/15, 9/15 and 1/15. |
N/A for 2022 |
| Is the election annual? |
Yes, annual election |
Annual |
Annual |
Annual |
Annual |
| I made the election for 2022 but I decided that I don’t want to make the election for 2023. What should I do? |
Don’t make the election for 2023, since the election is an annual choice. |
Don’t make the election for 2023, since the election is an annual choice. |
Don’t make the election for 2023, since the election is an annual choice. |
Don’t make the election for 2023, since the election is an annual choice. |
N/A for 2022 |
| How does the credit pass through? |
IT-653; attach to individual income tax return. |
Will show up on individual return Form 540. |
CT-1065, included in member K-1 |
Members receive credit against cross income tax equal to member’s tax on distributive proceeds paid by pass-through entity on Form PTE-K-1 |
TBD |
| What is the tax rate? |
6.85% on income up to $2M; 9.65% for income $2M-$5M; 10.3% for income $5M-$25M; 10.9% for income greater than $25M |
9.3% of qualified income |
6.99% |
5.675% on first $250K; 6.52% on $250K-$1M; 9.12% for $1M-$5M; 10.9% over $5M |
3.876% |
| What are additional requirements? |
File annual return by March 15th (or submit extension). Return must identify all partners, members or shareholders of the electing entity |
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| Who is ineligible for election? |
SMLLC, sole proprietor, trust nonprofit corporation |
Publicly traded partnerships (as members) cannot make election. Eligible for individual, fiduciary, trust, estate, entity taxed as corporation. Cannot file CA combined report |
SMLLCs |
SMLLCs |
SMLLC, sole proprietor, trust nonprofit corporation |
| Additional information |
Excess credit is claimed on the taxpayer’s individual return and may be refunded. |
Any excess credit is nonrefundable to the taxpayer. Credit may be carried forward for 5 years. SMLLC qualifies. |
Estimated tax payments must equal 90% of current year tax or 100% of prior year tax but only if annual payment $1,000 or greater. If annual payment less than $1,000 no estimated tax payments required. Any excess credit may be carried forward. |
Credit may not reduce statutory minimum tax. Excess credit may be carried forward 20 years |
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| What happens to overpayment of credit? |
If credit exceeds tax due, overpayment credited or refunded without interest. |
Excess credit is nonrefundable, carried forward 5 years. |
Excess credit treated as an overpayment is refunded if applied against individual income tax, provided taxpayer does not have other tax liabilities. Any corporate business tax excess is carried forward. |
Credit may not reduce statutory minimum tax. Excess credit may be carried forward 20 years |
TBD |
