Do my eligible clients for the PTE tax in AZ need to elect this for 2022 if they did not pay the tax in 2022, but want to pay it in 2023? How do I make this election?

adspadcpa · ‎01-23-2023

Most of my clients did not have the calculations ready in Q4, but have a good idea now and would like to take advantage of the extra delayed deductions (ie 2022 taxes paid in 2023). For 2023, I will work with them to be able to make relevant 2023 payments. Please advise.

Strongsilence-CPA · ‎01-23-2023

The election is made by paying the PTE tax timely. Read the instructions for Form 120S.

There are significant issues to know:

1. I advise learning how overpayments and underpayments of the PTE are treated by the AZ DOR.

2. What happens when some shareholders opt out?

3. Who are eligible shareholders?

Note that you have until the extended due date! That is really nice. California requires shareholders to pay by March 15. So Arizona law is more favorable.

I have only 1 Arizona client, so I have not yet learned all there is to know. The snip shows what I know. Please share what you learn, if you have time.

Strongsilence-CPA · ‎01-24-2023

@adspadcpa Let me know if anything I wrote is wrong. The thing that nags me is why AZ wants the PTE tax paid on an estimated voucher. That seems odd as contrasted with CA which has its own voucher. Thank you.