California A.B. 150, also known as the Pass-Through Entity Elective tax, allows state tax on passthrough income to be paid at the entity level at a flat rate of 9.3%. The law is effective for tax years beginning on or after January 1, 2021, and before January 1, 2026.
For business filers:
- See California PTE tax in a partnership for 565 and 568 returns, or
- See California PTE tax in a 100S for S corporations
For individual filers:
Follow these steps to enter a PTE tax credit received on a partnership K-1:
- Go to Screen 20.1, Partnership Information.
- Scroll down to Line 15 - Credits and Withholding.
- Enter the 15f amount in Credit from passthrough elective entity tax (PTE) {CA}.
Follow these steps to enter a PTE tax credit received on an S corporation K-1:
- Go to Screen 20.2, S Corporation Information.
- Scroll down to Line 13 - Credits and Withholding.
- Enter the 13d amount in Credit from passthrough elective entity tax (PTE) {CA}.
The PTE elective tax credit will flow to form 3804-CR. This is a nonrefundable credit. Any credit disallowed based on these provisions will carryover to future returns.
