18058: UT - SALT Deduction Workaround (PTET)

Utah law allows eligible entities to elect to be taxed at the entity level which then allows the "Final PTET" to take a credit on their individual return for taxes paid. The Final PTET, Final pass-through entity taxpayer, is a "...member of an LLC, partner of a partnership, shareholder of an s-corporation, or beneficiary of an estate or trust. A Final PTET does not include a business entity or an estate or trust."

The election is made online by filing Form TC-75, and making payments through Utah website. The election must be made on or before the last day of the PTE's taxable year.

The election can be made annually and cannot be revoked once made for the tax year. Individual members of a PTE cannot opt-out of the election if the PTE has made the election and paid the tax. 

Quarterly estimated payments are not required. Payments are not available through Drake Tax. 

1065

In Drake Tax, record the amount paid online by going to either: 

• UT > screen DIST > line 17, Code AP 
• UT > screen K1 > line 17, Code AP

In view mode, the amount is shown on both:

• UT TC65-K, line 17, Code AP 
• UT TC65-K1, line 17, Code AP

1120-S

In Drake Tax, record the amount paid online by going to either: 

• UT > screen DIST > line 18, Code AP 
• UT > screen K1 > line 18, Code AP

In view mode, the amount is shown on both: 

• UT TC-20S, Sch K, line 18, Code AP 
• UT TC-20S, Sch K-1, line 18, Code AP

1041

In Drake Tax, record the amount paid online by going to UT > screen 2 > and entering the amount for code AP 

In view mode, the amount is shown on both: 

• UT 41, Sch K, Line 13, Code AP
• UT 41, Sch K-1, Line 13, Code AP

1040

In Drake Tax, enter the credit amount on both:

• UT > screen 2 > Additions to Income > Code 67 
• UT > screen 3 > Nonrefundable Credits > Code AP

The amount is shown on both:

• UT TC-40A, Part 1, Code 67
• UT TC-40A, Part 4, Code AP

Notes: You may claim a credit equal to the amount of tax paid on your behalf by a pass-through entity to Utah under Section 59-10-1043.2(2), as shown on your K-1 from the pass-through entity. There is no form for this credit. Keep all related documents with your records. You may carry forward for the next five years any credit that is more than your tax liability.

Per the Utah FAQ page: 

"An individual who is a Final PTET will file their Utah return as normal with two minor changes.

1. TC-40A – Income Tax Supplemental Schedule – Part 1 – Additions to Income
   Enter the total of all state income taxes paid by any PTE to Utah and any other state for the year that were not included in the federal adjusted gross income calculated on the individual’s federal return. Enter the amount using code: 67 – Tax Paid on Behalf of a Pass-Through Entity Taxpayer.

2. TC-40A – Income Tax Supplemental Schedule – Part 4 – Nonapportionable Nonrefundable Credits
   Enter the nonrefundable credit as reported on the Utah Schedule K-1 for taxes paid by the PTE. Enter the credit using code: AP – Pass-through entity taxpayer income tax credit."