KY Pass-through entity tax election

Forum|Forum|2 years ago
January 13, 2024
1 reply
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Where do I enter the election for the pass-through entity tax for a Ky S-corp

ProConnect Tax

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Best answer by itonewbie

Forget about what I said ☝️

Just realized your question is about S-corp filing.

To elect PTE tax on the KY entity return, you need to do the following:

Go to State & Local > Adjustments > KY Adjustment;
Scroll down to the Kentucky Forms 740-PTET and 740NP-WH section; and
Check the box for Electing to pay income tax at the entity level (triggers Form 740-PTET).

This will generate the require 740-PTET, compute the PTE tax that would flow to each shareholder's K-1, and produce the PTET-CR for each shareholder.

itonewbie

Level 15

~~There are a few ways of finding the input field...~~

~~1. Find the input field based on how ProConnect Tax input screens are organized~~

Since PTET-CR is related to K-1, I'd first check Income > Passthrough K-1's and its State & Local tab. Apparently, the input is not there. Note, however, you should still complete the (EF ONLY) Kentucky Form PTET-CR / Form PTE-WH (Form 740-NP filers) section if your client will be e-filing.

For state-specific entries that are not applicable at the federal level, the first place you should then look is State & Local. Since this is a credit, you should check out Other Credits. Given there is no input screen for PTET-CR, I'd try KY Schedule ITC. As you scroll down the page, the section Kentucky Refundable Credits and the line entry titled Refundable pass-through entity tax credit from Form PTET-CR.

~~2. Drilling Down from Tax Form (but you need to read the filing instructions and know where to report the line item)...~~

Since this is supposed to go to Form 740, Line 31(g), you'd go to the form and click on the blue box on Line 31(g). This will bring to you the input screen (State & Local > Other Credits > KY Schedule ITC), albeit not the input cell. Just like what you'd need to do with method #1 explained above, you'd scroll down to Refundable pass-through entity tax credit from Form PTET-CR to make your input.

~~3. Use the search box~~

By entering the keywords, you can usually find the most relevant input fields. In this case, I'd enter PTET-CR. For some reason, however, this only brings up the fields for EF-ONLY entries. On the other hand, if you try PTE credit (which is inexact), you'll get the result Refundable pass-through entity tax credit from Form PTET-CR under Field description, which brings you to the input screen.

---------------------------------------------------------------------------------Still an AllStar