Q&A of the Week March 1, 2023

Question

What is the PTE Tax?

Answer

PTE is an elective tax that stands for Passthrough Entity.

Owners of PTEs include partners, shareholders, and LLC owners. They may receive a state tax credit for their share of the PTE tax or they may be able to exclude their share of the PTE's income from their state income tax.

A PTE tax election allows you to pay tax at the entity level rather than the individual level. 

The rules for PTEs vary by state, and not all states have enacted the PTE tax.

Here is more information about Ohio's PTE tax form:

https://tax.ohio.gov/static/ohiotaxalert/archivedalerts/ohiopteworkaround8522.pdf