This article will help you report the Minnesota elective pass-through entity tax (sometimes called PTE, PTET, or SALT workaround) and the resulting credit in Lacerte.
To claim the credit on an individual return:
- Go to Screen 53.222, MN Other Credits.
- Scroll down to the Pass-Through Entity Tax section.
- Enter the amount in Pass-through entity tax credit.
The credit will flow to Sch M1REF, line 9.
About the PTE election
Partnerships and S Corporations that do not have a partnership, LLC, or corporation, other than a disregarded entity, as a partner or shareholder, may elect to file and pay income tax at the entity level on behalf of their owners.
Single-member limited liability companies (SMLLCs) are not eligible to file Schedule PTE.
The election is made by filing Schedule PTE by the due date or extended due date of the entity’s return. The election may only be made by qualifying owners who collectively own more than 50% of the qualifying entity. Once made, the election is irrevocable for the tax year and is binding on all owners of the qualifying entity.
To generate the PTE for a partnership:
- Go to Screen 43.222, Pass-Through Entity Tax.
- Check the box for Elect Pass-through Entity Tax (PTE).
The program will calculate the Schedule PTE and carry the result to Form M2, line 2. The credit for each partner will flow to their Schedule KPI, line 30.
To generate the PTE for an S corporation:
- Go to Screen 48.221, Minnesota Taxes.
- Check the box for Elect Pass-through Entity Tax (PTE).
The program will calculate the Schedule PTE and carry the result to Form M8, line 3. The credit for each shareholder will flow to their Schedule KS, line 30.
