Dear Clients:
Beginning with the 2022 taxable year, passthrough entities that want to make the election to pay the passthrough entity elective tax (PTET) on behalf of their consenting, qualified owners must make a prepayment of the tax by June 15, 2022.
The prepayment has to be the greater of:
- 50% of the tax “paid the prior taxable year”; or
- $1,000
Entities that did not elect to pay the tax in 2021 will pay $1,000 on June 15, 2022 to preserve the right to make the election for 2022.
There are no exceptions to the 50% of prior-year tax requirement for the June 15 payment.
Please contact us to discuss if this may benefit you.
