PTET by State: Which States Have a Pass-Through Entity Tax

Which states have a PTET election, and what does each charge?

A PTET (also called a PTE tax, BAIT, elective tax or SALT parity election) lets a partnership or S corporation pay state income tax itself instead of leaving it to the owners. IRS Notice 2020-75 treats a qualifying payment as deductible by the entity. Each state writes its own version, so the rate, the owners it covers, the deadline and the owner's credit all differ.

The tables list each state whose own tax site confirmed the election. "Not printed" means the state pages read gave no figure. A year beside a figure means the state's page stopped at that year.

A case is not simple when owners live in different states, an owner is a company or trust, the entity earns income in several states, or the election cannot be undone once made. Before asking, gather the owner list with each owner's home state and type, the entity's type and states of income, and last year's state payments.

How and by when does the entity elect, and can it undo the election?

In most states the entity elects every year, on or with its return or by a payment, and the election then binds every owner. Deadlines run from early in the year to well after year-end, and a few states let the entity reverse the election only before a set date.

When are estimated payments due?

An electing entity usually has to prepay during the year, not only with the return. The states below publish their dates; the others require estimates under their own rules, or the state pages read did not give dates.

How do owners get the benefit?

States use three methods: a refundable credit, a nonrefundable credit, or an exclusion or deduction of the income the entity already taxed. The credit is claimed on the owner's own state return, so the owner generally files there.

The pages read did not state the owner benefit for Louisiana, Montana or South Carolina. South Carolina has owners use Form I-335 for income taxed at the entity level.

Which states have no PTET election?

A state is missing from the tables above when its own site did not confirm an election. Four were checked and show none:

• Alaska: no election appears in the corporate income tax statute read (Alaska Statutes 43.20).
• Florida: the constitution bars a state tax on the income of natural persons who are residents or citizens, so owners have no state income tax for an entity tax to replace (Florida Constitution).
• Delaware: its code says a pass-through entity as such is not subject to income tax (Delaware Code); the state sites read show no election.
• District of Columbia: a bill to create one (Bill 26-0324) was still pending when the District's tax office testified on March 19, 2026; its later status was not confirmed. The District already taxes S corporations and unincorporated businesses through its franchise taxes (Office of Tax and Revenue).

Every other state not in the tables or the list above was not confirmed on its own site; that is not a finding that it has no election (Massachusetts and Maine are among them). Check a state's own site before assuming there is none. The guide to states with no income tax covers what owners and LLCs in those states still pay.

An entity cannot borrow its home state's election for another state; it can use only that state's own election, if it meets that state's rules.

Do owners in other states still file or get withholding taken?

Often yes. The election changes who pays, not whether an owner must file to claim a credit.

• California: the credit cannot be claimed on a nonresident group return, only on the owner's own return, and the election does not change nonresident withholding (FTB; see California nonresident withholding).
• New York: partners on a group return for nonresidents cannot claim the PTET credit there; they file their own New York return (DTF).
• Arizona: no composite return; each owner who did not opt out files an Arizona return to claim the credit (Department of Revenue).
• Colorado: an electing entity may not file a composite return, and a nonresident individual need not file if the only Colorado income is on the entity's return (Department of Revenue).
• Georgia: the election binds nonresident owners, and no composite return is filed for them (DOR).
• Hawaii: a nonresident individual need not file if the only Hawaii income is from electing entities that file and pay the tax (Hawaii Legislature, S.B. 2725 (2024)).
• Indiana: the PTET replaces composite tax up to the amount of PTET owed (DOR).
• New Jersey: an electing entity can still file a composite return for nonresident members who join it (Division of Taxation).
• Ohio: filing Form IT 4738 meets Ohio filing for nonresident and trust investors unless they have other Ohio income (Department of Taxation).
• Oregon: an entity must still file a composite return for owners who choose to be included (Department of Revenue).

Whether the entity files in another state at all is covered in business income tax in other states. For an owner holding a K-1 that shows a PTET credit, see state returns for fund investors. Fund composite returns and withholding are in fund state returns and nonresident withholding.

Why might the election save nothing even where it exists?

The election saves nothing when the owner cannot use the state benefit or the federal deduction does not help. The decision itself, including the federal SALT limit, is covered in whether to elect.

• The owner's credit is nonrefundable and the owner has little tax in that state.
• The owner lives in a state that gives no credit for another state's entity tax; Indiana's page, for one, mentions owners in "reverse credit" states.
• The election binds every owner, including one who cannot use it or who is excluded from the base.
• The credit is claimed in a different year from the payment; Minnesota's page warns an owner may have to claim in the year after.
• The credit is less than the tax paid, as in Connecticut and Rhode Island.
• The state's program ends: Minnesota's page allows tax years beginning before January 1, 2028, and Oregon extended its program to the same cutoff; California's runs through tax years beginning before January 1, 2031.

Example

These scenarios are illustrative; amounts are in US dollars.

Owners in California and Georgia

An S corporation earns $200,000 and has two equal owners, one living in California and one in Georgia. Each state has its own election, its own rate and its own owner benefit: California gives a nonrefundable credit to consenting owners, while Georgia owners subtract the income the entity already taxed instead of taking a credit. The entity looks up each state's row, then asks whether each owner can use what that state gives.

A partnership in a state with no election

A partnership formed in a state with no PTET earns $150,000 from New York customers and has a New York resident partner. The home state offers nothing to borrow. New York's election is a separate choice for the entity, made online by its own deadline and subject to its own owner rules.

Resident owners taxed on all income, or only state-source income

An LLC taxed as a partnership has two members: one lives in Kansas and one does not. Its profit is $100,000, of which $40,000 is Kansas-source. Kansas taxes the nonresident member's Kansas-source share. For the Kansas resident, the entity chooses either the Kansas-source share or the whole share, and must use the same method for all resident owners. Other states set this differently, so each state's source decides.

Different for you?

• Several states or a fund: the owner list, residence and entity type decide which row applies to whom. Bring them to corporate tax help before electing anywhere.
• You want to know whether to elect at all: see should my entity elect.
• Your owners live in other states than the entity: see business income tax in other states.
• You hold a K-1 showing a PTET credit: see state returns for fund investors.
• You need the underlying rules: see how S corporations are taxed or how partnerships are taxed.