Case:The taxpayer was a Virginia resident throughout 2025. He received a 2025 Form 502 Schedule VK-1, which reports only the following four items:Total Taxable Income / Apportionable Income: $80,000 Virginia Additions / Net Income Tax Used as a Deduction: $6,500 Virginia Subtractions / Conformity Depreciation: $1,400 Refundable Credits / Pass-Through Entity Elective Tax (PTET) Payment Credit: $5,000Questions:The Form 760 Instructions refer to a "Pass-Through Entity Tax Add-Back." I am not sure how this applies in this situation. Does this mean I should add back the $5,000 PTET payment credit on Virginia Form 760CG, Line 2 (Additions)? Could you please explain how each of the amounts reported on Schedule VK-1 should be reported on the Virginia Form 760?Thank you very much for your assistance. Have a wonderful day!

workhard2022

Level 5

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How to handle PTE Tax Paid on Schedule K1?

Forum|Forum|14 days ago
June 18, 2026
8 replies
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Case:

The taxpayer was a Virginia resident throughout 2025. He received a 2025 Form 502 Schedule VK-1, which reports only the following four items:

Total Taxable Income / Apportionable Income: $80,000
Virginia Additions / Net Income Tax Used as a Deduction: $6,500
Virginia Subtractions / Conformity Depreciation: $1,400
Refundable Credits / Pass-Through Entity Elective Tax (PTET) Payment Credit: $5,000

Questions:

The Form 760 Instructions refer to a "Pass-Through Entity Tax Add-Back." I am not sure how this applies in this situation. Does this mean I should add back the $5,000 PTET payment credit on Virginia Form 760CG, Line 2 (Additions)?
Could you please explain how each of the amounts reported on Schedule VK-1 should be reported on the Virginia Form 760?

Thank you very much for your assistance. Have a wonderful day!

Best answer by sjrcpa

The $6,500 is a VA addition. $1,400 is a VA subtraction. If the $80K is the same as the federal amount, it should flow from the K-1 input. The $5,000 PTET goes on the VA credit form.

sjrcpaAnswer

Level 15

The $6,500 is a VA addition. $1,400 is a VA subtraction. If the $80K is the same as the federal amount, it should flow from the K-1 input. The $5,000 PTET goes on the VA credit form.

The more I know the more I don’t know.

W

workhard2022Author

Level 5

Thank you so much for your help!

W

workhard2022Author

Level 5

Could you help confirm a similar question?

For a Maryland Schedule K-1, if Part D, Nonresident/Resident Tax, Line 2, "Pass-through entity election tax paid on member's share of income," is $3,018, would the correct treatment be to manually add back the $3,018 PTE tax paid on Maryland Form 505, Line 19 (Additions to Income) as part of Maryland income?

In addition, should this same $3,018 PTE tax paid also be reported on Maryland Form 505, Line 47, "Nonresident tax paid by pass-through entities"?

On page 1 of the Maryland Schedule K-1, there is a bold note under Part D, Line 5 that appears to address this situation, but I'm not sure I'm interpreting it correctly.

Many Thanks!

W

workhard2022Author

Level 5

Please see the snippet of the Maryland Schedule K-1 showing the PTE tax paid below. Thanks!

W

workhard2022Author

Level 5

Plus+ MD K1/Part D/ Line 5 Note: Note: Members with entries on Lines 2 and 4 are required to addback the amount
of the credit total on Line 2 and 4 on their respective returns

sjrcpa

Level 15

Yes the 3,018 is a MD addition on the 505. I trust your Line # references are correct. If it is pass through entity tax (PTET) it is not nonresident withholding. The PTET goes on a MD credit form - Form 502CR Page 4 Part CC Line 9. Attach a pdf of the MD K-1 to the return.

The more I know the more I don’t know.

W

workhard2022Author

Level 5

Thanks for your help! This is for the 2025 individual tax return.

After entering the $3,018 in ProConnect under “Nonresident/Entity Election Tax” → “Nonresident tax paid by this PTE”, it flows to Form 505, Line 47 (Nonresident tax paid by pass-through entities, attached Maryland Schedule K-1 (510/511)).

Based on your comment, it sounds like this amount should instead be treated as a refundable credit from Form 502CR (Part CC, Line 9/10) and ultimately flow to Form 505, Line 48 (Refundable income tax credits from Form 502CR).

To better confirm the correct treatment for this Maryland Schedule K-1:
The K-1 shows only three items:

Member income: $34,000
Subtraction – net decoupling modification: $3,400
Nonresident/resident tax (PTE election tax paid on member’s share of income): $3,018

Does this confirm that the $3,018 should be treated as a 502CR credit rather than a Form 505 Line 47 nonresident tax payment?

W

workhard2022Author

Level 5

Please see the snippet below showing how the $3,018 is presented on the MD Schedule K-1. Thank you!