How to enter Colorado PTE in ProSeries

This article will help you report the Colorado elective pass-through entity tax (sometimes called PTE, PTET, or SALT workaround) and the resulting credit in ProSeries.

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SALT Parity Act Election

Beginning in tax year 2022, partnerships and S corporations may elect to be subject Colorado income tax at the entity level pursuant to the SALT Parity Act. The election is binding upon all partners or shareholders, regardless of whether the partner is an individual, corporation, or other legal entity. The election applies to, and Colorado tax must be paid with respect to, both resident and nonresident partners and shareholders.

Each partner or shareholder is allowed a credit against their Colorado income tax liability equal to the share of the tax imposed upon and paid by the entity with respect to the partner’s or shareholder’s income. All other credits are passed through to the partner or shareholder and must be claimed on a return filed by the partner or shareholder along with the refundable SALT Parity Act credit. When a partnership or S corporation makes the SALT Parity Act election, all partners or shareholders must add back any deduction taken under section 199A of the Internal Revenue Code.

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To claim the credit on an individual return:

1. Open the Colorado return.
2. Press F6 to bring up Open Forms.
3. Type CR and press OK to bring up the Form 104CR.
4. On the table above line 1 enter the Pass-through Entity Name, Ownership % and Entity Account No.
5. Scroll down to line 12 and enter the amount of the Pass-Through Entity owner Tax Credit.

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To generate PTE for a partnership:

1. Open the Colorado Partnership Information Worksheet.
2. Scroll down to Part II - Tax Year and Filing Information.
3. Check the PTE is making the annual voluntary election under the SALT Parity ACT for tax year 2022 checkbox.
4. This marks "If pass-through entity is electing to be subject to tax at the entity level under the SALT Parity Act (section 39-22-342, C.R.S.) for this tax year, mark this box" on page 1 of DR 0106, calculates tax on Part III of page 2.

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To generate PTE for an S corporation:

1. Open the Colorado S Corporation Information Worksheet.
2. Scroll down to Part II - Tax Year and Filing Information.
3. Check the PTE is making the annual voluntary election under the SALT Parity ACT for tax year 2022 checkbox.
4. This marks "If pass-through entity is electing to be subject to tax at the entity level under the SALT Parity Act (section 39-22-342, C.R.S.) for this tax year, mark this box" on page 1 of DR 0106, calculates tax on Part III of page 2.

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