Fundamentals of Pass-through Entity Tax (PTET)
Author: A.J. Reynolds
| CPE Credit: |
1 hour for CPAs
1 hour Federal Tax Related for EAs and OTRPs
1 hour Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
December 22, 2017 the Tax Cuts & Jobs Act (TCJA) passed and imposed a $10,000 limitation on the deduction of state and local taxes (SALT) for tax years 2018 through 2025.
November 9, 2020 IRS issued Notice 2020-75, which announced rules regarding clarification that state and local income taxes imposed on and paid by Pass-Through Entities will be allowed as an ordinary and necessary deduction in computing its non-separately taxable income or loss for the taxable year of such payment. Hence, these payments will not be subject to the SALT limitations.
The course will present tax professionals with up-to-date valuable knowledge on this PTET and how these rules impact their clients who operate pass-through entities (PTE).
Publication Date: July 2025
Designed For
All Tax Professionals that prepare Pass-Through Entities tax returns such as Form 1120S and Form 1065.
Topics Covered
- Fundamentals of Pass-through Entity Tax (PTET)
- Explore Notice 2020-75
- Assess PTET Tax Savings
- Examine what is a PTE
- Expiration of the SALT & related issues with PTET
Learning Objectives
- Identify provisions of Notice 2020-75
- Identify rules regarding specified income tax payments (SITPS)
- Explain the importance of ensuring your Pass Through Entity (PTE) takes advantage of PTET elections
- Identify which Entities can use this election
- Explain what expiration of the SALT would mean for PTE
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (1 hour)
Program Prerequisites
None
Advance Preparation
None
