Quick answer
PTET moves qualifying state income tax from the owner level to the entity level. IRS Notice 2020-75 treats qualifying entity payments as deductible in computing the partnership’s or S corporation’s federal income, rather than as the owner’s capped personal SALT deduction. State law determines the election, tax base, rate, payment timing, and owner credit.
How the PTET deduction works
- 1
The entity confirms eligibility and elects under state law
Partnerships and S corporations are common eligible entities, but owner and entity restrictions differ.
- 2
The entity calculates and pays the state tax
The state defines the tax base, apportionment, rate, estimates, and payment deadline.
- 3
The entity deducts the qualifying payment federally
Notice 2020-75 says the payment is taken into account in computing the entity’s non-separately stated taxable income or loss.
- 4
The owner receives state-level relief
The state may provide a refundable or nonrefundable credit, carryforward, subtraction, or exclusion.
- 5
The preparer reconciles the federal and state effects
PTET can reduce federal pass-through income and QBI while producing state addbacks, credits, and owner-basis consequences.
The 2026 SALT cap changed the break-even point
For 2026, the personal SALT deduction cap is scheduled to be $40,400 for most filers and $20,200 for married filing separately. The higher amount begins to phase down when modified adjusted gross income exceeds $505,000, with a statutory floor of $10,000, and the temporary regime is scheduled to return to a $10,000 cap in 2030.
PTET is not automatically valuable just because it is available. An owner who already fits all personal taxes under the cap may get little federal benefit, while still bearing extra return, estimate, and cash-flow work. High-income owners can still benefit when the phaseout pushes their usable personal cap down.
Which states offer PTET?
The AICPA’s April 14, 2026 map is a useful national starting point, but a map cannot carry the election. Programs differ on tax years, eligible owners, rates, deadlines, estimates, revocability, and whether owners receive a credit, exclusion, or deduction.
The tracker below links each published row to state authority and records its verification date. Use it to screen the regime, then open the filing-year election, estimated-payment, entity-return, and owner-relief instructions before acting.
Open the AICPA state PTE map2026 state PTET election tracker
Compare enacted current or new PTET regimes for 2026 and 2027, plus recently expired programs. Every published row links to current official guidance; jurisdictions outside that scope are omitted, and the data is screening material rather than a substitute for filing-year instructions.
Alabama
ActiveVerified 2026-08-30
Rate and base
5% of Alabama taxable income
Eligible entities
Partnerships, S corporations
Election
With the timely Form 65 or Form 20S, including extensions · Electing entity return; more than 50% voting-owner consent · Annual election
Owner relief
Refundable credit equal to the owner share of Alabama PTET paid · Credit · 100% refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Required when expected liability exceeds $500; generally April 15, June 15, September 15, and December 15.
The entity-level return is generally due March 15 for a calendar-year entity. The election is made separately for each year.
Arizona
ActiveVerified 2026-08-30
Rate and base
2.5% for 2026
Eligible entities
Partnerships, S corporations
Election
With the timely original Form 165 or Form 120S, including extensions · Eligible owners opt in through the entity return · Annual election
Owner relief
Credit allocated to participating owners · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
The election applies only to eligible owners who opt in. Confirm credit use and any refund treatment on the current owner instructions.
Filing-year confirmation: Current primary guidance verified the election and rate, but not a single unqualified statement that every excess owner credit is refundable.
Arkansas
ActiveVerified 2026-09-12
Rate and base
3.7%: highest 2026 individual rate, following the retroactive 2026 reduction
Eligible entities
Partnerships, S corporations, LLCs taxed as either
Election
Generally by April 15 of the tax year · Form AR362, ATAP, or the entity return under current DFA procedures · Annual election
Owner relief
Owner credit under the Arkansas elective PTET rules · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
Arkansas guidance and regulations should be checked for the applicable rate, election path, and owner-credit limitations for the filing year.
Filing-year confirmation: Owner credit utilization still requires the owner return; payment arithmetic is implemented separately.
California
ActiveVerified 2026-08-30
Rate and base
9.3% of qualified net income
Eligible entities
Partnerships, S corporations, Eligible LLCs taxed as either
Election
Timely original return, including extensions · Election and allocation reported with FTB 3804 · Annual election
Owner relief
Nonrefundable qualified-owner credit · Credit · Five-year carryforward
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: For 2026 to 2030, the June 15 payment is generally $1,000 or 50% of prior-year elective tax, whichever is greater; the balance is due with the original return.
The program runs through 2030. A short June payment no longer automatically invalidates the election, but can reduce affected owner credits under the current statutory formula.
Colorado
ActiveVerified 2026-08-30
Rate and base
4.4% of the elective entity tax base
Eligible entities
Partnerships, S corporations
Election
With Form DR 1705 or the timely DR 0106 under current instructions · State election form or entity return · Annual election
Owner relief
Refundable owner credit · Credit · 100% refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Required when expected net liability is more than $5,000.
The election is irrevocable for the elected year. Verify the current return and payment instructions before filing.
Connecticut
ActiveVerified 2026-09-12
Rate and base
6.99% on the qualified Connecticut PE base
Eligible entities
Partnerships, S corporations
Election
Timely CT-1065/CT-1120SI, including extensions · Annual election box on the composite return; file CT-PET electronically · Annual election
Owner relief
Owner PE credit equal to 87.5% of allocated tax for eligible income-tax members; corporate-member rules differ · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Generally required at $1,000 or more; calendar-year installments April 15, June 15, September 15, and January 15.
2026 General Assembly report confirms the rate and credit. The currently published December 2025 instructions describe base allocation: modified Connecticut-source income plus the resident portion of unsourced income. A supplied qualified base must already incorporate those rules.
Georgia
ActiveVerified 2026-09-12
Rate and base
4.99% for 2026; HB1023 aligns the electing entity rate with the individual rate for the corresponding year
Eligible entities
Partnerships, S corporations
Election
By the entity return due date, including extensions · Election checkbox and schedules on Form 600S or Form 700 · Annual election
Owner relief
Owners exclude their distributive share of income taxed at the entity level, subject to Georgia rules · Exclusion
State notes and primary sources
Covered tax years: 2026 and 2027
The older partnership overview retains 5.19%. DOR’s enacted HB1023 summary supplies the entity-rate cross-reference; its current 2026 individual update supplies 4.99%. Use the corresponding-year rate.
Hawaii
ActiveVerified 2026-09-12
Rate and base
9% for tax years 2024 and later
Eligible entities
Partnerships, S corporations
Election
With the timely entity return, including a qualifying extension · Form N-362E and Schedule PTE with Form N-20 or N-35; electronic filing/payment required absent exemption · Annual election
Owner relief
Nonrefundable pro rata credit; unused amounts may carry forward until exhausted under post-2023 rules · Credit · Until exhausted
State notes and primary sources
Covered tax years: 2026 and 2027
Qualified members are individuals, trusts and estates. Credit claimants add back their share of deducted entity tax for tax years after 2024. Capital gains included in the election use the same 9% PTE rate.
Idaho
ActiveVerified 2026-09-12
Rate and base
5.3% corporate-rate ABE payment; individual zero-rate threshold does not apply
Eligible entities
Partnerships, S corporations
Election
Any original return; after July 1, 2026, an amended change is permitted before the original due date · Affected business entity election on the Idaho return · Annual election
Owner relief
Owner credit equal to the Idaho tax paid on the owner share · Credit · Full credit
State notes and primary sources
Covered tax years: 2026 and 2027
Payment is generally due on the 15th day of the fourth month after year-end. Idaho changed election timing effective July 1, 2026.
Illinois
ActiveVerified 2026-08-30
Rate and base
4.95% of net income
Eligible entities
Partnerships other than publicly traded partnerships, S corporations
Election
On the timely IL-1065 or IL-1120-ST, including extensions · Election on the entity return · Annual election
Owner relief
Owner credit for the distributive share of PTET paid · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Required when expected liability exceeds $500; installments generally in months 4, 6, 9, and 12.
The election is permanent in Illinois law and irrevocable after the extended return due date. Separate partnership-base rules apply for tax years ending on or after December 31, 2026.
Indiana
ActiveVerified 2026-08-30
Rate and base
2.95% for 2026; 2.90% for 2027
Eligible entities
Partnerships, S corporations, LLCs taxed as either
Election
During the tax year or with a timely original return, including extensions · Indiana PTET election; not available after the original return is filed · Annual election
Owner relief
Owner credit for the owner share of Indiana PTET · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Calendar-year installments generally due April 20, June 20, September 20, and December 20.
County income tax is not part of the entity-level PTET computation.
Iowa
ActiveVerified 2026-09-12
Rate and base
3.8% for 2026 under Iowa Code 422.16C(4) and 422.5
Eligible entities
Formerly eligible partnerships and S corporations
Election
Six months after the original IA 1065 or IA 1120S due date · Election on IA 1065/IA 1120S or GovConnectIowa · Annual election
Owner relief
Refundable owner credit equal to 96.2% of allocated 2026 PTET; excluded owner classes apply · Credit
State notes and primary sources
Covered tax years: 2026 and 2027; no scheduled sunset while IRC 164(b)(6) applies
Estimated payments: Generally required above $1,000 of expected PTET after credits; filing extension does not defer payment.
DOR updated its FAQ December 22, 2025: federal legislation removed the scheduled sunset. Do not label Iowa expired for 2026.
Kansas
ActiveVerified 2026-09-12
Rate and base
5.58% for 2026
Eligible entities
Partnerships, S corporations
Election
With the timely Form K-120S · Election on Form K-120S · Annual election
Owner relief
Credit for eligible individual and trust owners; special trust limitations apply · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
The election is irrevocable for the year. A trust generally may not pass its PTET credit through to beneficiaries. Confirm the current top rate and estimated-payment rules.
Kentucky
ActiveVerified 2026-09-12
Rate and base
3.5% for 2026 under the individual-rate cross-reference
Eligible entities
Partnerships, S corporations, Other qualifying pass-through entities
Election
With timely Form 740-PTET under the filing-year instructions · Entity election binding on all owners · Annual election
Owner relief
100% refundable allocated owner credit · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
Entity and owner eligibility should be confirmed in the current Form 740-PTET package.
Louisiana
ActiveVerified 2026-09-12
Rate and base
3% for 2025 and later: statute ties elective entity rate to the individual rate
Eligible entities
S corporations, Other qualifying pass-through entities
Election
Before or during the year, generally by the 15th day of the fourth month after year-end · Form R-6980; effective only after Department acceptance
Owner relief
Owner income exclusion rather than a dollar-for-dollar credit · Exclusion
State notes and primary sources
Covered tax years: 2026 and 2027
The election continues until terminated. A terminated election generally triggers a five-year re-election bar.
Maine
NewVerified 2026-09-12
Rate and base
7.15% on the qualified 2026 distributive-share base
Eligible entities
Partnerships, S corporations, Other eligible pass-through entities under enacted law
Election
By the filing deadline, including extensions · Annual election under forms and procedures to be issued by Maine Revenue Services · Annual election
Owner relief
Refundable credit equal to 90% of the owner share of PTET · Credit · 90% refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Effective July 29, 2026. Forms and operational guidance were still emerging at review. The law also addresses an additional estimated amount for certain nonresident members.
Filing-year confirmation: Payment arithmetic is supported by enacted law; implementation forms and filing procedures still need confirmation before an actual election.
Maryland
ActiveVerified 2026-09-12
Rate and base
2026 individual-owner base: 8.75%; entity-member base: 8.25%
Eligible entities
Partnerships, S corporations, LLCs taxed as pass-through entities
Election
2026 special relief: the next filing or payment after April 15 controls; generally the second estimate · Comptroller disregards the first-quarter 2026 election/nonelection under April 13 relief · Annual election
Owner relief
Owner credit subject to Maryland member and sourcing rules · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
2026 remains Maryland-source income for resident and nonresident members. The 2027 base changes do not apply early. Individual capital-gain surtax is separate.
Filing-year confirmation: 2027 base computation requires its own future-year guidance.
Massachusetts
ActiveVerified 2026-09-12
Rate and base
5% Chapter 63D, with optional separate 4% Chapter 63E on each eligible owner’s excess over the surtax threshold
Eligible entities
Partnerships, S corporations, Eligible pass-through entities
Election
With a timely original return, including extensions · Separate annual elections under the applicable chapter · Annual election
Owner relief
Refundable owner credit equal to 90% of the allocated excise · Credit · 90% refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Generally required when expected excise is $400 or more; calendar-year dates April 15, June 15, September 15, and January 15.
Numeric comparison models Chapter 63D only. July 31 guidance supersedes the June surtax FAQ for the new Chapter 63E election. Owner allocations must be known before computing Chapter 63E.
Michigan
ActiveVerified 2026-08-30
Rate and base
4.25% for 2026
Eligible entities
Partnerships, S corporations, Other qualifying flow-through entities
Election
Generally the last day of the ninth month of the tax year (September 30 for calendar-year entities) · Election through Michigan Treasury Online
Owner relief
Owner credit for the allocated Michigan flow-through entity tax · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
The election is irrevocable for three tax years. The regime remains available while the federal Section 164(b)(6)(B) limitation remains in effect.
Minnesota
ActiveVerified 2026-08-30
Rate and base
9.85% of the elective PTE tax base
Eligible entities
Partnerships, S corporations, Eligible LLCs taxed as either
Election
By the extended return due date (September 15 for a calendar-year entity) · Election on the entity return; more than 50% qualifying-owner control required · Annual election
Owner relief
Fully refundable owner credit · Credit · 100% refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Minnesota extended its elective PTET only through tax year 2027. The election cannot be made late and becomes irrevocable after the original due date.
Mississippi
ActiveVerified 2026-09-12
Rate and base
Business schedule: 0% on first $5,000, 4% on next $5,000, 5% above $10,000; not the 4% personal rate
Eligible entities
Partnerships, S corporations, Other eligible pass-through entities
Election
During the year, by the return due date, or with the filed return, whichever is later under current guidance · Form 84-381; more than 50% owner consent by default
Owner relief
100% pro rata credit; excess may be refunded or carried forward at the owner’s election · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
DOR PTE instructions apply the corporate-rate schedule to electing entities. The 2026 individual 4% rate must not be substituted. Regular S corporation franchise tax remains separate.
Missouri
ActiveVerified 2026-09-12
Rate and base
4.7%: highest 2026 individual rate on the supplied qualified election base
Eligible entities
Partnerships, S corporations
Election
Follow the filing-year SALT Parity Act return procedure · Annual election on the applicable Missouri entity filing · Annual election
Owner relief
100% allocated nonrefundable credit, with unlimited carryforward · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
The owner credit is nontransferable. Confirm the current top rate and election deadline on the filing-year form.
Montana
ActiveVerified 2026-08-30
Rate and base
5.65% for 2026; 5.4% for 2027
Eligible entities
Partnerships, S corporations
Election
With a timely Form PTE, including extensions (September 15 for a calendar-year entity) · Election on Form PTE · Annual election
Owner relief
Fully refundable owner credit · Credit · 100% refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Required when expected liability exceeds $500; calendar-year installments generally April 15, June 15, September 15, and January 15.
Tax is generally due by the original March 15 return date even though the election can be made by the extended due date.
Filing-year confirmation: Entity eligibility can require judgment where an S corporation has instruments that may be treated as a second class of stock.
Nebraska
ActiveVerified 2026-08-30
Rate and base
4.55% for 2026; 3.99% for 2027 and later years
Eligible entities
Partnerships, S corporations, Eligible pass-through entities
Election
With Form PTET-E or the timely entity return, including extensions · Election form or election checkbox under current instructions · Annual election
Owner relief
Owner credit after the entity pays Nebraska PTET · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Generally required when expected liability is $400 or more.
The election is irrevocable for the elected year.
New Jersey
ActiveVerified 2026-08-30
Rate and base
Graduated: 5.675% through $250,000; 6.52% from $250,000 to $1 million; 10.9% above $1 million
Eligible entities
Partnerships, S corporations, LLCs taxed as either
Election
Electronic election with the original PTE-100 by March 15 for a calendar-year entity · Electronic BAIT return · Annual election
Owner relief
Refundable owner credit under BAIT rules · Credit · Refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Generally required when expected liability exceeds $400; April 15, June 15, September 15, and January 15 for calendar-year filers.
The graduated rate is applied to the distributive proceeds tax base under New Jersey BAIT rules.
New Mexico
ActiveVerified 2026-09-12
Rate and base
5.9% on the supplied qualified entity base
Eligible entities
Partnerships, S corporations
Election
With the entity return · Election on the New Mexico PTE filing · Annual election
Owner relief
Credit equal to allocated entity tax reported on RPD-41359; actual use follows owner rules · Credit
State notes and primary sources
Covered tax years: 2026 and 2027
The election is irrevocable once made and applies to all owners for the year. Confirm excess-credit treatment in the filing-year owner instructions.
Filing-year confirmation: No claim of universal refundability; owner credit use must be reconciled.
New York
ActiveVerified 2026-08-30
Rate and base
Graduated: 6.85% through $2 million; 9.65%, 10.30%, and 10.90% at higher PTET bases
Eligible entities
Partnerships, New York S corporations
Election
January 1 through March 15 of the tax year · Online Services election by an authorized person · Annual election
Owner relief
Fully refundable owner credit · Credit · 100% refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Generally due March 15, June 15, September 15, and December 15.
The annual election is irrevocable after the first estimated-payment due date. The PTET return is generally due March 15 after year-end.
Nested local programs
New York City PTET
Rate: 3.876%
Election: Same January 1-March 15 period as the New York State election · Requires a valid New York State PTET election · Annual election
Owner relief: Fully refundable NYC owner credit · Credit · 100% refundable
North Carolina
ActiveVerified 2026-09-12
Rate and base
3.99% for 2026
Eligible entities
Partnerships, S corporations, Eligible LLCs taxed as either
Election
With a timely entity return, including extensions · Election on the North Carolina entity return · Annual election
Owner relief
Owner deduction/exclusion for income taxed at the entity level; not a credit · Exclusion
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Generally required when expected liability is $500 or more; calendar-year installments April 15, June 15, September 15, and December 15.
The calendar-year return is generally due April 15. Statutory entity and owner exclusions can affect eligibility.
Ohio
ActiveVerified 2026-08-30
Rate and base
3% of qualifying taxable income
Eligible entities
Partnerships, S corporations, Qualifying pass-through entities
Election
With timely Form IT 4738 · Election on Form IT 4738 · Annual election
Owner relief
Refundable owner credit · Credit · Refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Generally due April 15, June 15, September 15, and January 15.
The election is irrevocable for the year. A calendar-year Form IT 4738 is generally due April 15.
Oklahoma
ActiveVerified 2026-09-12
Rate and base
2026 individual/trust members: 4.5%; corporation/partnership members: 4%
Eligible entities
Partnerships, S corporations
Election
Generally by the 15th day of the third month after the tax year begins, or with a timely original return under the post-2023 procedure · Form 586, OkTAP, or filing-year return procedure
Owner relief
Owner excludes income included in the entity-level tax base · Exclusion
State notes and primary sources
Covered tax years: 2026 and 2027
The numeric illustration selects only the individual/trust-member base. Corporate and partnership owners require the separate 4% column of the 2026 estimate worksheet.
Oregon
ActiveVerified 2026-09-12
Rate and base
9% on the first $250,000 of distributive proceeds; 9.9% above
Eligible entities
S corporations, Partnerships, LLCs taxed as either; member eligibility restrictions apply
Election
Timely Form OR-21, including extensions · Annual Form OR-21 election · Annual election
Owner relief
Qualifying members claim the allocated PTE-E tax credit · Credit
State notes and primary sources
Covered tax years: 2026 and 2027; tax years beginning before January 1, 2028
Estimated payments: For 2026 only, first and second installments both due June 15; remaining installments September 15 and January 15 after year-end.
SB1510 extended the program through 2027. The sunset language in the 2025 OR-21 instructions has been superseded.
Rhode Island
ActiveVerified 2026-08-30
Rate and base
5.99%
Eligible entities
Partnerships, S corporations, Eligible pass-through entities
Election
With the entity return and Schedule PTE under current instructions · Election through the Rhode Island entity filing · Annual election
Owner relief
Owner credit equal to 90% of allocated PTET under post-2024 rules · Credit · 90% of allocated PTET
State notes and primary sources
Covered tax years: 2026 and 2027
Owners add back the deducted entity tax as required by Rhode Island instructions. Confirm whether an excess credit is refundable for the specific owner and form.
Filing-year confirmation: The current source did not support a universal refundability label for every owner class.
South Carolina
ActiveVerified 2026-08-30
Rate and base
3% of active trade or business income included in the election
Eligible entities
Partnerships, S corporations
Election
By the entity return due date, including extensions · Election on the South Carolina entity return · Annual election
Owner relief
Owner excludes income taxed at the entity level; no separate PTET credit · Exclusion
State notes and primary sources
Covered tax years: 2026 and 2027
Only qualifying active trade or business income is included. Passive and other categories require separate analysis.
Utah
ActiveVerified 2026-09-12
Rate and base
4.45% for 2026
Eligible entities
Partnerships, S corporations, Qualifying pass-through entities
Election
Last day of the entity tax year · Electronic Form TC-75 plus full payment · Annual election
Owner relief
Nonrefundable owner credit · Credit · 10-year carryforward
State notes and primary sources
Covered tax years: 2026 and 2027
The election is irrevocable. The election payment cannot be refunded or reduced, and there is no quarterly installment schedule for the election itself.
Virginia
ActiveVerified 2026-08-30
Rate and base
5.75%
Eligible entities
Partnerships, S corporations, Qualifying pass-through entities
Election
With the electronic Form 502PTET under filing-year instructions · Annual election on the PTET return · Annual election
Owner relief
Refundable owner credit · Credit · Refundable
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Quarterly estimated payments apply under Virginia PTET procedures.
Virginia made the elective regime permanent. Confirm the calendar-year filing and extension dates in the current Form 502PTET instructions.
West Virginia
ActiveVerified 2026-09-12
Rate and base
4.58%: top 2026 individual rate on the qualified elective base
Eligible entities
Partnerships, S corporations, Qualifying pass-through entities
Election
With Form EPT-100; generally March 15 for a calendar-year entity · Annual election on Form EPT-100 · Annual election
Owner relief
100% allocated owner credit; excess carries forward up to five years under 11-21-3a(q) · Credit · Up to five years
State notes and primary sources
Covered tax years: 2026 and 2027
Estimated payments: Calendar-year installments generally April 15, June 15, September 15, and January 15.
The annual election is irrevocable. West Virginia Code 11-21-3a ties the tax to the highest individual rate and specifies a five-year carryforward for excess owner credit; do not describe it as universally refundable.
Wisconsin
ActiveVerified 2026-08-30
Rate and base
7.9%
Eligible entities
Partnerships, S corporations
Election
On the timely entity return, including extensions · Election on Schedule 3-ET or Schedule 5S-ET; more than 50% owner consent · Annual election
Owner relief
Owner excludes income taxed at the entity level; no separate credit · Exclusion
State notes and primary sources
Covered tax years: 2026 and 2027
The election may generally be amended or revoked through the extended due date under the current instructions.
PTET and the SALT workaround: all-state reference
Follow the entity payment through the federal deduction and the owner’s state return. The program tracker below contains detailed elections, rates and owner relief. This coverage table also includes states outside that tracker so an omitted state cannot be mistaken for a verified zero-tax result.
For the $500,000 business-owner scenario, compare the deduction with owner credits, QBI, resident-state treatment and the timing of cash payments. A $25,000 payment is not automatically a $25,000 tax saving.
| State | Program research | Election timing | Eligible entities / source |
|---|---|---|---|
| Alabama | active: 5% of Alabama taxable income | With the timely Form 65 or Form 20S, including extensions | Partnerships, S corporations State PTET authority |
| Alaska | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Arizona | active: 2.5% for 2026 | With the timely original Form 165 or Form 120S, including extensions | Partnerships, S corporations State PTET authority Current primary guidance verified the election and rate, but not a single unqualified statement that every excess owner credit is refundable. |
| Arkansas | active: 3.7%: highest 2026 individual rate, following the retroactive 2026 reduction | Generally by April 15 of the tax year | Partnerships, S corporations, LLCs taxed as either State PTET authority Owner credit utilization still requires the owner return; payment arithmetic is implemented separately. |
| California | active: 9.3% of qualified net income | Timely original return, including extensions | Partnerships, S corporations, Eligible LLCs taxed as either State PTET authority |
| Colorado | active: 4.4% of the elective entity tax base | With Form DR 1705 or the timely DR 0106 under current instructions | Partnerships, S corporations State PTET authority |
| Connecticut | active: 6.99% on the qualified Connecticut PE base | Timely CT-1065/CT-1120SI, including extensions | Partnerships, S corporations State PTET authority |
| Delaware | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Florida | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Georgia | active: 4.99% for 2026; HB1023 aligns the electing entity rate with the individual rate for the corresponding year | By the entity return due date, including extensions | Partnerships, S corporations State PTET authority |
| Hawaii | active: 9% for tax years 2024 and later | With the timely entity return, including a qualifying extension | Partnerships, S corporations State PTET authority |
| Idaho | active: 5.3% corporate-rate ABE payment; individual zero-rate threshold does not apply | Any original return; after July 1, 2026, an amended change is permitted before the original due date | Partnerships, S corporations State PTET authority |
| Illinois | active: 4.95% of net income | On the timely IL-1065 or IL-1120-ST, including extensions | Partnerships other than publicly traded partnerships, S corporations State PTET authority |
| Indiana | active: 2.95% for 2026; 2.90% for 2027 | During the tax year or with a timely original return, including extensions | Partnerships, S corporations, LLCs taxed as either State PTET authority |
| Iowa | active: 3.8% for 2026 under Iowa Code 422.16C(4) and 422.5 | Six months after the original IA 1065 or IA 1120S due date | Formerly eligible partnerships and S corporations State PTET authority |
| Kansas | active: 5.58% for 2026 | With the timely Form K-120S | Partnerships, S corporations State PTET authority |
| Kentucky | active: 3.5% for 2026 under the individual-rate cross-reference | With timely Form 740-PTET under the filing-year instructions | Partnerships, S corporations, Other qualifying pass-through entities State PTET authority |
| Louisiana | active: 3% for 2025 and later: statute ties elective entity rate to the individual rate | Before or during the year, generally by the 15th day of the fourth month after year-end | S corporations, Other qualifying pass-through entities State PTET authority |
| Maine | new: 7.15% on the qualified 2026 distributive-share base | By the filing deadline, including extensions | Partnerships, S corporations, Other eligible pass-through entities under enacted law State PTET authority Payment arithmetic is supported by enacted law; implementation forms and filing procedures still need confirmation before an actual election. |
| Maryland | active: 2026 individual-owner base: 8.75%; entity-member base: 8.25% | 2026 special relief: the next filing or payment after April 15 controls; generally the second estimate | Partnerships, S corporations, LLCs taxed as pass-through entities State PTET authority 2027 base computation requires its own future-year guidance. |
| Massachusetts | active: 5% Chapter 63D, with optional separate 4% Chapter 63E on each eligible owner’s excess over the surtax threshold | With a timely original return, including extensions | Partnerships, S corporations, Eligible pass-through entities State PTET authority |
| Michigan | active: 4.25% for 2026 | Generally the last day of the ninth month of the tax year (September 30 for calendar-year entities) | Partnerships, S corporations, Other qualifying flow-through entities State PTET authority |
| Minnesota | active: 9.85% of the elective PTE tax base | By the extended return due date (September 15 for a calendar-year entity) | Partnerships, S corporations, Eligible LLCs taxed as either State PTET authority |
| Mississippi | active: Business schedule: 0% on first $5,000, 4% on next $5,000, 5% above $10,000; not the 4% personal rate | During the year, by the return due date, or with the filed return, whichever is later under current guidance | Partnerships, S corporations, Other eligible pass-through entities State PTET authority |
| Missouri | active: 4.7%: highest 2026 individual rate on the supplied qualified election base | Follow the filing-year SALT Parity Act return procedure | Partnerships, S corporations State PTET authority |
| Montana | active: 5.65% for 2026; 5.4% for 2027 | With a timely Form PTE, including extensions (September 15 for a calendar-year entity) | Partnerships, S corporations State PTET authority Entity eligibility can require judgment where an S corporation has instruments that may be treated as a second class of stock. |
| Nebraska | active: 4.55% for 2026; 3.99% for 2027 and later years | With Form PTET-E or the timely entity return, including extensions | Partnerships, S corporations, Eligible pass-through entities State PTET authority |
| Nevada | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| New Hampshire | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| New Jersey | active: Graduated: 5.675% through $250,000; 6.52% from $250,000 to $1 million; 10.9% above $1 million | Electronic election with the original PTE-100 by March 15 for a calendar-year entity | Partnerships, S corporations, LLCs taxed as either State PTET authority |
| New Mexico | active: 5.9% on the supplied qualified entity base | With the entity return | Partnerships, S corporations State PTET authority No claim of universal refundability; owner credit use must be reconciled. |
| New York | active: Graduated: 6.85% through $2 million; 9.65%, 10.30%, and 10.90% at higher PTET bases | January 1 through March 15 of the tax year | Partnerships, New York S corporations State PTET authority |
| North Carolina | active: 3.99% for 2026 | With a timely entity return, including extensions | Partnerships, S corporations, Eligible LLCs taxed as either State PTET authority |
| North Dakota | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Ohio | active: 3% of qualifying taxable income | With timely Form IT 4738 | Partnerships, S corporations, Qualifying pass-through entities State PTET authority |
| Oklahoma | active: 2026 individual/trust members: 4.5%; corporation/partnership members: 4% | Generally by the 15th day of the third month after the tax year begins, or with a timely original return under the post-2023 procedure | Partnerships, S corporations State PTET authority |
| Oregon | active: 9% on the first $250,000 of distributive proceeds; 9.9% above | Timely Form OR-21, including extensions | S corporations, Partnerships, LLCs taxed as either; member eligibility restrictions apply State PTET authority |
| Pennsylvania | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Rhode Island | active: 5.99% | With the entity return and Schedule PTE under current instructions | Partnerships, S corporations, Eligible pass-through entities State PTET authority The current source did not support a universal refundability label for every owner class. |
| South Carolina | active: 3% of active trade or business income included in the election | By the entity return due date, including extensions | Partnerships, S corporations State PTET authority |
| South Dakota | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Tennessee | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Texas | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Utah | active: 4.45% for 2026 | Last day of the entity tax year | Partnerships, S corporations, Qualifying pass-through entities State PTET authority |
| Vermont | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| Virginia | active: 5.75% | With the electronic Form 502PTET under filing-year instructions | Partnerships, S corporations, Qualifying pass-through entities State PTET authority |
| Washington | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
| West Virginia | active: 4.58%: top 2026 individual rate on the qualified elective base | With Form EPT-100; generally March 15 for a calendar-year entity | Partnerships, S corporations, Qualifying pass-through entities State PTET authority |
| Wisconsin | active: 7.9% | On the timely entity return, including extensions | Partnerships, S corporations State PTET authority |
| Wyoming | no-elective-program: No resident-owner elective PTET; $0 incremental election payment | Not applicable: no resident-owner elective PTET | Not established |
Use the detailed tracker for credits, payments and local programs. DC is outside the 50-state table; this addition makes no claim about a DC elective workaround.
Compare S-corp owner considerations · All state guidesState-by-State PTET and SALT Workaround Guide
PTET can move a qualifying state income-tax deduction to an eligible partnership or S corporation. The comparison calculates each verified program’s payment and potential federal deduction effect on a supplied $234,936 qualified base at a 32% marginal-rate sensitivity. It shows owner credits separately and shows fixed QBI and personal SALT assumptions. This is a deduction opportunity comparison, not a ranking of net election savings.
The scorecard compares a potential federal deduction effect at a fixed 32% marginal rate, before state reconciliation. It assumes eligible participation, timely payment, no personal SALT deduction displaced and no QBI deduction erosion. It is not net PTET savings. The fixed worked example below states those same assumptions.
The published 50-state ranking
Compare state pass-through entity tax options, potential federal benefits and the election rules business owners need to check.
Higher scores mean a stronger result on the factors this guide measures. They do not guarantee a better fit for your household or investment. Ties stay tied, and missing data is clearly marked.
Taxstra’s published 2026 ranking. One methodology, applied consistently to every state. See the factors and scoring rules.
Pick a state. See how it fits.
Explore grades out of 10, category ranks and the tradeoffs behind them. Each state uses the same published factors and weights.
The map loads when the page opens. All 50 states are available in the selector and table.
Gray = unavailable or provisional; no comparable rank. Alaska and Hawaii shown as insets.
Boundaries: U.S. Census Bureau / US Atlas.
Why Illinois scores this way
Illinois ranks #20 of 50, with $3,721. The category tiles show its strengths and tradeoffs.
A higher category score means a stronger result on that measure. Check the “Good fit for” and “Less suited to” notes against your own priorities.
2026 state guidePTET & SALT workarounds
Illinois
Taxstra’s state comparison
Selected-category grade#20 in the comparison
How to read this score
Illustrative incremental federal deduction effect on a $234,936 qualified entity tax base: eligible owner and timely election/payment assumed; 32% constant marginal rate, zero personal SALT deduction displaced and zero QBI deduction erosion. This is NOT net PTET savings or a best-election recommendation. State addbacks, credit shortfalls, timing and resident-state relief remain separate. The 13 states with no elective program have zero opportunity under this resident-only example; an unavailable or ineligible calculation is distinct from zero.
Potential federal PTET benefit
#20 of 50 · 100% weight$3,721 potential federal tax benefit at a 32% rate; state adjustments and other deduction limits can reduce the final benefit.
Quality of life
#5 of 50 · WalletHub category · Not in overall scoreWalletHub: #5 for Quality of Life, #18 overall; this score uses the category.
Cost of hiring employees
#36 of 50 · Not in overall score$355,650. Estimated pay for five workers using the state’s average wage; actual jobs and salaries will differ.
Homeowner property taxes
#45 of 50 · Not in overall score$5,399 typical annual homeowner tax bill; check the specific property before budgeting.
Good fit for
- Eligible Illinois pass-through owners who can reconcile the entity payment with the specified owner relief
Less suited to
- Owners treating the election rate or face value of a credit as the amount of net tax savings
Illinois: full analysis and evidenceRead the state-specific explanation and supporting sources.
Illinois
Back to comparison ↑The Illinois election uses 4.95% of net income. Election timing: On the timely IL-1065 or IL-1120-ST, including extensions. Owner relief: Owner credit for the distributive share of PTET paid. Required when expected liability exceeds $500; installments generally in months 4, 6, 9, and 12.
Illinois makes the PTET election on a timely IL-1120-ST or IL-1065, including extensions. The regime is permanent; partnership tax-base changes for years ending on or after December 31, 2026 require care when comparing a partnership with an S corporation.
- Illinois DOR current income-tax rates (2026; 2026-09-12)
- Illinois DOR, PTET election FAQ (2026; 2026-08-30)
- Illinois DOR, pass-through information (2026; 2026-08-30)
- Illinois FY 2027-01 bulletin (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
Cite the state. Include the method.
Use the state, guide title, published methodology and source years when citing a score. State selection changes the card, not the ranking methodology.
Media and interview inquiries · Source data · Taxstra methodology
Full ranking table · 50 of 50 statesCompare every state’s rank, housing costs, property taxes and tax treatment.
50 of 50 states
| Rank | State | PTET federal deduction opportunity at 32% | Home value ACS 2024 | Property-tax bill ACS 2024 median | Price index BEA 2024 | Individual bonus treatment |
|---|---|---|---|---|---|---|
| 1 | Minnesota | $7,40510.0 / 10 category grade | $344,600 | $3,501 | 98.6 | For §168(k), add back 80% and deduct one-fifth of that addition in each of the next five years. Qualified production property under §168(n) is not added back. |
| 2 | California | $6,9929.5 / 10 category grade | $759,500 | $5,369 | 110.7 | California does not conform to federal bonus depreciation; compute California depreciation separately. |
| 3 | Hawaii | $6,7669.2 / 10 category grade | $875,900 | $2,385 | 110.0 | Hawaii does not allow the federal bonus deduction; compute Hawaii depreciation separately. |
| 3 | Oregon | $6,7669.2 / 10 category grade | $497,500 | $3,895 | 103.4 | Oregon disallows federal bonus depreciation for 2026 to 2027; implementing recovery instructions are pending. |
| 5 | Maryland | $6,5789.0 / 10 category grade | $436,300 | $4,144 | 105.0 | Generally decoupled from federal bonus; qualifying manufacturing property may receive different treatment. |
| 6 | Wisconsin | $5,9398.2 / 10 category grade | $294,700 | $3,680 | 94.1 | Wisconsin does not adopt federal §168(k) or §168(n); compute Wisconsin depreciation separately. |
| 7 | Maine | $5,3757.5 / 10 category grade | $341,900 | $3,103 | 97.1 | Add back the federal bonus amount and claim depreciation under Maine’s pro-forma computation. |
| 8 | Connecticut | $5,2557.4 / 10 category grade | $396,900 | $6,573 | 103.6 | Add back 100% of federal bonus, then deduct 25% of the addition in each of the next four years. |
| 9 | New York | $5,1507.3 / 10 category grade | $449,800 | $6,542 | 107.9 | Reverse federal §168(k) and §168(n) deductions and claim New York depreciation. |
| 10 | Rhode Island | $4,5036.5 / 10 category grade | $455,700 | $4,886 | 102.3 | Compute depreciation and basis as though federal bonus depreciation had not been enacted. |
| 11 | New Mexico | $4,4366.4 / 10 category grade | $279,900 | $1,776 | 92.2 | Ordinary §168(k) bonus flows into individual income in 2026. The enacted 2027 depreciation reversal changes the corporate base, not the individual base. |
| 12 | Virginia | $4,3236.3 / 10 category grade | $403,500 | $2,872 | 101.1 | Recompute Virginia depreciation as though the federal bonus provisions did not apply. |
| 13 | New Jersey | $4,2666.2 / 10 category grade | $496,000 | $9,358 | 108.8 | New Jersey does not follow the federal bonus deduction; calculate New Jersey depreciation and basis separately. |
| 14 | Montana | $4,2486.2 / 10 category grade | $425,400 | $2,939 | 94.6 | Montana begins with the current federal income base and has no current bonus-depreciation addback. |
| 15 | Kansas | $4,1956.1 / 10 category grade | $238,700 | $2,983 | 90.1 | Current Kansas statutes recognize federal §168(k); a direct current official statement on §168(n) was not located. |
| 16 | Idaho | $3,9855.8 / 10 category grade | $446,400 | $1,912 | 95.5 | Add back the federal bonus difference in the first year; deduct later Idaho-versus-federal depreciation differences. |
| 17 | Alabama | $3,7595.6 / 10 category grade | $233,300 | $890 | 88.8 | Follows the federal §168(k) and §168(n) deductions for 2026 to 2027. |
| 17 | Massachusetts | $3,7595.6 / 10 category grade | $607,400 | $6,080 | 105.8 | §168(k) remains disallowed. §168(n) is disallowed for 2026 and follows federal law beginning in 2027. |
| 19 | Georgia | $3,7515.6 / 10 category grade | $343,300 | $2,554 | 96.3 | Use Georgia depreciation without federal §168(k) or §168(n). |
| 20 | Illinois | $3,7215.5 / 10 category grade | $280,700 | $5,399 | 100.0 | Reverse federal §168(k)/§168(n) amounts and compute the Illinois depreciation modification. |
| 21 | Mississippi | $3,6635.5 / 10 category grade | $186,500 | $1,221 | 87.0 | Mississippi permits a state 100% first-year deduction for qualifying depreciable property; it is not simple federal bonus conformity. |
| 22 | Missouri | $3,5335.3 / 10 category grade | $254,400 | $2,021 | 90.8 | Missouri follows current federal depreciation and does not require a bonus addback for current property. |
| 23 | West Virginia | $3,4435.2 / 10 category grade | $170,800 | $881 | 89.5 | West Virginia adopted the 2025 federal changes, so §168(k) and §168(n) flow through for 2026 to 2027. |
| 24 | Nebraska | $3,4215.2 / 10 category grade | $263,100 | $3,739 | 90.1 | Nebraska follows the current federal depreciation deduction for 2026 to 2027. |
| 25 | Oklahoma | $3,3835.1 / 10 category grade | $222,100 | $1,672 | 87.8 | Oklahoma permits a state 100% expensing election for qualifying property; it is not simple federal bonus conformity. |
| 26 | Utah | $3,3455.1 / 10 category grade | $545,200 | $2,648 | 98.9 | Utah starts with current federal adjusted gross income and does not enumerate a §168(k) or §168(n) reversal. |
| 27 | Colorado | $3,3085.0 / 10 category grade | $574,600 | $2,828 | 103.1 | Colorado follows the federal deductions for §168(k) bonus and §168(n) qualified production property. |
| 28 | Michigan | $3,1954.9 / 10 category grade | $254,200 | $2,988 | 96.2 | For individuals and flow-through entities, Michigan retains the pre-OBBBA phaseout: 20% federal bonus in 2026 and 0% in 2027; §168(n) is disallowed. |
| 29 | North Carolina | $3,0004.6 / 10 category grade | $333,000 | $2,044 | 94.3 | Add back 85% of the federal accelerated-depreciation amount, then deduct 20% of that addition in each of the next five years. |
| 30 | Iowa | $2,8574.5 / 10 category grade | $227,300 | $2,937 | 87.8 | Iowa follows current federal depreciation, including §168(k) and §168(n), for 2026 to 2027. |
| 31 | Arkansas | $2,7824.4 / 10 category grade | $215,600 | $1,113 | 86.9 | Federal bonus depreciation is not adopted; use the Arkansas depreciation computation. |
| 32 | Kentucky | $2,6314.2 / 10 category grade | $226,000 | $1,611 | 90.2 | Kentucky does not adopt the current federal bonus provisions; use Kentucky depreciation. |
| 33 | Louisiana | $2,2553.7 / 10 category grade | $223,200 | $1,187 | 88.2 | Louisiana offers an optional state 100% expensing deduction for qualifying property; later federal depreciation on the same basis is added back. |
| 33 | Ohio | $2,2553.7 / 10 category grade | $239,800 | $2,937 | 92.8 | For §168(k), generally add back five-sixths and deduct one-fifth of that addback in each of the next five years. Payroll-growth and NOL exceptions can change the result; §168(n) generally follows federal law. |
| 33 | South Carolina | $2,2553.7 / 10 category grade | $299,500 | $1,337 | 93.7 | Use South Carolina depreciation without federal §168(k) or §168(n). |
| 36 | Indiana | $2,2183.7 / 10 category grade | $243,500 | $1,798 | 93.3 | Add back federal bonus depreciation and maintain Indiana basis for later depreciation or disposition. |
| 37 | Arizona | $1,8793.3 / 10 category grade | $426,000 | $1,828 | 100.7 | Individuals retain the full federal §168(k) bonus amount for eligible new property in 2026; §168(n) is separately added back. |
| 38 | Alaska | $01.0 / 10 category grade | $376,500 | $3,976 | 102.4 | Alaska does not impose a broad individual income tax. |
| 38 | Delaware | $01.0 / 10 category grade | $371,600 | $1,750 | 99.8 | Ordinary eligible 2026 property retains 20% bonus under the pre-OBBBA schedule; the rest follows regular depreciation. |
| 38 | Florida | $01.0 / 10 category grade | $396,900 | $2,993 | 103.4 | Florida does not impose a broad individual income tax. |
| 38 | Nevada | $01.0 / 10 category grade | $455,500 | $2,143 | 100.0 | Nevada does not impose a broad individual income tax. |
| 38 | New Hampshire | $01.0 / 10 category grade | $458,800 | $6,707 | 104.2 | New Hampshire does not impose a broad individual income tax. |
| 38 | North Dakota | $01.0 / 10 category grade | $266,100 | $2,550 | 89.0 | North Dakota follows the federal deductions through its current federal income starting point. |
| 38 | Pennsylvania | $01.0 / 10 category grade | $277,600 | $3,214 | 97.6 | Pennsylvania personal income tax uses its own depreciation rules rather than the federal bonus amount. |
| 38 | South Dakota | $01.0 / 10 category grade | $289,600 | $2,940 | 88.6 | South Dakota does not impose a broad individual income tax. |
| 38 | Tennessee | $01.0 / 10 category grade | $332,600 | $1,488 | 91.9 | Tennessee does not impose a broad individual income tax. |
| 38 | Texas | $01.0 / 10 category grade | $313,200 | $4,108 | 97.1 | Texas does not impose a broad individual income tax. |
| 38 | Vermont | $01.0 / 10 category grade | $352,800 | $5,026 | 98.0 | Vermont disallows §168(k) and §168(n), then permits recovery under the non-bonus depreciation schedule. |
| 38 | Washington | $01.0 / 10 category grade | $602,200 | $4,729 | 107.0 | Washington does not impose a broad individual income tax. |
| 38 | Wyoming | $01.0 / 10 category grade | $339,500 | $1,947 | 92.7 | Wyoming does not impose a broad individual income tax. |
Pass-through entity tax example
Compare the federal deduction opportunity
A PTET payment is not a saving. This comparison calculates the potential federal deduction effect at a selected marginal rate, shows the face value of owner credits, and keeps unmodeled state interactions separate.
2026 rules · verified September 12, 2026 · educational, not individualized tax advice. These are controlled illustrations, not tax returns. Each state base is a separate input; the tool never assumes gross profit is the state-taxable base.
$234,936 qualified PTET base; one eligible owner receives 100% of the allocation; timely election and payments; a constant 32% federal marginal rate; no reduction of the QBI deduction and no personal SALT deduction displaced. All states use these same fixed assumptions. Results are federal deduction opportunities before state reconciliation, not net savings.
Illinois: payment versus federal opportunity
4.95% of net income Owner credit for the distributive share of PTET paid
- Entity payment
- $11,629
- Face-value owner credit
- $11,629
- Federal deduction opportunity
- $3,721
Formula: [allocated PTET × (1 − QBI reduction) − personal SALT deduction displaced] × selected federal marginal rate. Eligibility, timely elections and payments are assumed only for this illustration. A negative result is possible. This is not net federal-plus-state savings.
Election: On the timely IL-1065 or IL-1120-ST, including extensions. Election on the entity return.
Illinois DOR, PTET election FAQ · Illinois DOR, pass-through information · Illinois FY 2027-01 bulletin · IRS Notice 2020-75, entity payments of state income taxes · IRS Publication 505, 2026 SALT deduction limits · IRS: qualified business income deduction questions and answersExact scenario assumptions and limits
- One full-year resident owner, married filing jointly, no other wages, all business activity in the selected state.
- $500,000 operating profit is after non-owner expenses. The separate five-person $500,000 payroll has already been deducted, and is never deducted twice.
- $1.5 million revenue and $250,000 owner wages are illustrative controlled inputs, not empirical averages or a reasonable-compensation conclusion.
- Owner-income comparison supplies $500,000 of state-taxable ordinary business income. It is a separate rate/base benchmark, not a derivation of state taxable income from gross profit.
- Entity illustration separately supplies $234,936 of state entity income after owner wages and employer FICA; state-specific modifications have to be reconciled before an actual return.
- No PTET election, local tax, credits, AMT, capital gains, state special-rate election or personalized deductions in the regular owner benchmark. Ohio business-income rules are separately applied.
- The $234,936 qualified PTET base is a separate supplied assumption. The 32% federal marginal rate is a sensitivity, not a calculated household bracket. The published comparison holds QBI deduction reduction and displaced personal SALT deduction at zero for every state.
What changes the comparisonThe rules, exceptions and tradeoffs behind the figures.
Use the 2026 federal SALT limits
IRS Publication 505 states a $40,400 individual SALT limit for 2026, reduced above $505,000 of modified AGI but not below $10,000; married-filing-separately amounts are half. A business owner must compare the election with the deduction actually available without it.
Owner relief is not uniform
Some states refund credits, some carry excess credit forward, and others exclude the taxed income. Maine, Massachusetts and Rhode Island use a 90% owner-credit mechanism in the cited rules. Wisconsin uses an exclusion at a 7.9% entity rate.
The sunset list changed
Iowa’s current FAQ removes its scheduled expiration. Oregon SB1510 extends its program through 2027 and changes the first two 2026 estimate dates. Use current law over sunset language in older return instructions.
Election date and payment date are separate
New York’s election occurs during the tax year, Utah requires a year-end report and payment, and several states allow an election with the later return. Extensions to file commonly do not extend payment deadlines.
Every state, explainedBrowse all 50 state chapters, with detailed analysis and linked evidence.
AlabamaRead state analysis
Alabama
Back to comparison ↑The Alabama election uses 5% of Alabama taxable income. Election timing: With the timely Form 65 or Form 20S, including extensions. Owner relief: Refundable credit equal to the owner share of Alabama PTET paid. Required when expected liability exceeds $500; generally April 15, June 15, September 15, and December 15.
An Alabama S corporation elects annually on Form 20S and also files Form EPT. Governing-body consent and more than 50% voting-owner consent matter; expected tax above $500 creates an estimated-payment obligation.
- Alabama DOR individual tax rates (2026; 2026-09-12)
- Alabama Department of Revenue, electing pass-through entities (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
AlaskaRead state analysis
Alaska
Back to comparison ↑Alaska has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
An Alaska wage-tax result of zero does not establish a zero-tax S corporation. This research has not reconciled the entity return, corporate exceptions or local business obligations, and therefore does not calculate an all-in S corporation bill.
- Alaska government tax facts (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
ArizonaRead state analysis
Arizona
Back to comparison ↑The Arizona election uses 2.5% for 2026. Election timing: With the timely original Form 165 or Form 120S, including extensions. Owner relief: Credit allocated to participating owners. Confirm payment due dates separately from the election deadline.
An Arizona S corporation uses the original Form 120S election process; a partnership uses Form 165. The tracker verifies a 2.5% 2026 elective rate, but does not support promising that every excess owner credit is refundable.
Source qualification: PTET: Current primary guidance verified the election and rate, but not a single unqualified statement that every excess owner credit is refundable.
- Arizona DOR individual withholding and tax rate (2026; 2026-09-12)
- Arizona Publication 713, elective PTET (2026; 2026-08-30)
- Arizona 2026 Form 120-PTE-W (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
ArkansasRead state analysis
Arkansas
Back to comparison ↑The Arkansas election uses 3.7%: highest 2026 individual rate, following the retroactive 2026 reduction. Election timing: Generally by April 15 of the tax year. Owner relief: Owner credit under the Arkansas elective PTET rules. Confirm payment due dates separately from the election deadline.
Arkansas has an elective PTE regime, but the current research retains a review flag for election procedures and detailed owner-credit mechanics. The verified high-income wage schedule does not by itself establish the complete S corporation tax base.
Source qualification: PTET: Owner credit utilization still requires the owner return; payment arithmetic is implemented separately.
- Arkansas DFA 2026 special-session SB1 fiscal impact (2026; 2026-09-12)
- Arkansas SB1, Act 2 of the 2026 special session (2026; 2026-09-12)
- Arkansas DFA, pass-through entity tax (2026; 2026-08-30)
- Arkansas elective PTET rule (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
CaliforniaRead state analysis
California
Back to comparison ↑The California election uses 9.3% of qualified net income. Election timing: Timely original return, including extensions. Owner relief: Nonrefundable qualified-owner credit. Carryforward: Five-year carryforward. For 2026 to 2030, the June 15 payment is generally $1,000 or 50% of prior-year elective tax, whichever is greater; the balance is due with the original return.
The 9.3% elective PTET is separate from the ordinary S corporation franchise tax. Owner relief is a nonrefundable credit with a five-year carryforward; after the 2026 program change, a short June payment can reduce credits even when the election survives.
- California FTB September 3, 2026 indexing memorandum, Attachment 2 (CalTax-hosted copy) (2026; 2026-09-12)
- California FTB 2025 Publication 1067: individual-return 1% tax on excess over $1 million (2026; 2026-09-12)
- California FTB, pass-through entity elective tax (2026; 2026-08-30)
- California FTB S corporation tax and minimum tax (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
ColoradoRead state analysis
Colorado
Back to comparison ↑The Colorado election uses 4.4% of the elective entity tax base. Election timing: With Form DR 1705 or the timely DR 0106 under current instructions. Owner relief: Refundable owner credit. Required when expected net liability is more than $5,000.
Colorado permits the election through DR 1705 or the qualifying entity-return procedure. An entity expecting more than $5,000 of net elective liability should examine estimated payments instead of waiting until the owner’s return is prepared.
- Colorado 2026 DR 0104EP estimate worksheet (2026; 2026-09-12)
- Colorado DOR, SALT Parity Act guidance (2025; 2026-08-30)
- Colorado 2026 Form DR 1705 (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
ConnecticutRead state analysis
Connecticut
Back to comparison ↑The Connecticut election uses 6.99% on the qualified Connecticut PE base. Election timing: Timely CT-1065/CT-1120SI, including extensions. Owner relief: Owner PE credit equal to 87.5% of allocated tax for eligible income-tax members; corporate-member rules differ. Generally required at $1,000 or more; calendar-year installments April 15, June 15, September 15, and January 15.
Connecticut counts an S corporation as a pass-through entity for this regime and requires electronic filing/payment. Its separate composite-return and CT-PET obligations need to be planned together rather than inferred from the federal S election.
- Connecticut 2026 CT-1040ES: initial tax, 2% phaseout and recapture tables (2026; 2026-09-12)
- Connecticut DRS current elective PTE eligibility, election and payments (2026; 2026-09-12)
- Connecticut CT-PET December 2025 instructions: 6.99% tax and 87.5% owner credit (2025; 2026-09-12)
- Connecticut General Assembly February 2026 tax expenditure report: PTE rate and credit (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
DelawareRead state analysis
Delaware
Back to comparison ↑Delaware has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
A Delaware formation address does not turn an operating company’s revenue into tax-free income. Model owner income tax separately from Delaware gross receipts, business licensing and the entity’s formation/annual obligations.
- Delaware DOR employer guide, income computation table (2026; 2026-09-12)
- Delaware DOR: S corporation income passes to shareholders; nonresident estimated payments are personal tax (2026; 2026-09-12)
- Delaware DOR gross receipts tax FAQ (2026; 2026-09-12)
- Delaware DOR LLC tax classification (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
FloridaRead state analysis
Florida
Back to comparison ↑Florida has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Florida identifies S corporations that pay federal income tax on Form 1120-S line 23c among its corporate filers. The ordinary pass-through case must be distinguished from those federal entity-tax exceptions.
- Florida DOR individual income-tax FAQ (2026; 2026-09-12)
- Florida DOR corporate income tax and S corporation filing exceptions (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
GeorgiaRead state analysis
Georgia
Back to comparison ↑The Georgia election uses 4.99% for 2026; HB1023 aligns the electing entity rate with the individual rate for the corresponding year. Election timing: By the entity return due date, including extensions. Owner relief: Owners exclude their distributive share of income taxed at the entity level, subject to Georgia rules. Confirm payment due dates separately from the election deadline.
Georgia’s election is annual on Form 600S or Form 700 by the return deadline, including extensions. Relief comes through an owner income exclusion; the electing base has restrictions on deductions that would otherwise belong to a natural-person owner.
- Georgia DOR important tax updates, 2026 (2026; 2026-09-12)
- Georgia DOR 2024 enacted legislation: HB1023 aligns electing entity and individual rates (2024; 2026-09-12)
- Georgia Rule 560-7-3-.03, PTE election and owner exclusion (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
HawaiiRead state analysis
Hawaii
Back to comparison ↑The Hawaii election uses 9% for tax years 2024 and later. Election timing: With the timely entity return, including a qualifying extension. Owner relief: Nonrefundable pro rata credit; unused amounts may carry forward until exhausted under post-2023 rules. Carryforward: Until exhausted. Confirm payment due dates separately from the election deadline.
Hawaii requires Form N-362E and Schedule PTE with the entity return. Qualified individual, trust and estate owners receive a nonrefundable credit with carryforward; credit claimants add back deducted entity tax under the post-2024 rules.
- Hawaii Department of Taxation tax-year rate tables (2026; 2026-09-12)
- Hawaii tax tables for years after December 31, 2024 (2026; 2026-09-12)
- Hawaii Department of Taxation PTE rate, election and owner credit (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
IdahoRead state analysis
Idaho
Back to comparison ↑The Idaho election uses 5.3% corporate-rate ABE payment; individual zero-rate threshold does not apply. Election timing: Any original return; after July 1, 2026, an amended change is permitted before the original due date. Owner relief: Owner credit equal to the Idaho tax paid on the owner share. Confirm payment due dates separately from the election deadline.
The Idaho ABE tax uses the corporate income-tax rate and an owner credit. Payment and election timing are separate questions, so an extended filing window should not be treated as an extension to pay.
- Idaho Code 63-3024: 5.3% rate and statutory CPI indexing (2026; 2026-09-12)
- BLS CPI-U U.S. city average: 2025 annual average 321.943 (2025; 2026-09-12)
- BLS historical CPI-U: 1998 annual average 163.0 (1998; 2026-09-12)
- Idaho Commission published annual tables: latest posted year 2025 (2025; 2026-09-12)
- BLS archived CPI files: October 2025 data unavailable during funding lapse (2025; 2026-09-12)
- Idaho State Tax Commission, pass-through entities (2026; 2026-08-30)
- Idaho, 2026 ABE election-timing change (2026; 2026-08-30)
- Idaho Tax Commission business income tax rate (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
IllinoisRead state analysis
Illinois
Back to comparison ↑The Illinois election uses 4.95% of net income. Election timing: On the timely IL-1065 or IL-1120-ST, including extensions. Owner relief: Owner credit for the distributive share of PTET paid. Required when expected liability exceeds $500; installments generally in months 4, 6, 9, and 12.
Illinois makes the PTET election on a timely IL-1120-ST or IL-1065, including extensions. The regime is permanent; partnership tax-base changes for years ending on or after December 31, 2026 require care when comparing a partnership with an S corporation.
- Illinois DOR current income-tax rates (2026; 2026-09-12)
- Illinois DOR, PTET election FAQ (2026; 2026-08-30)
- Illinois DOR, pass-through information (2026; 2026-08-30)
- Illinois FY 2027-01 bulletin (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
IndianaRead state analysis
Indiana
Back to comparison ↑The Indiana election uses 2.95% for 2026; 2.90% for 2027. Election timing: During the tax year or with a timely original return, including extensions. Owner relief: Owner credit for the owner share of Indiana PTET. Calendar-year installments generally due April 20, June 20, September 20, and December 20.
Indiana allows the PTET election during the year or with the timely original return, including extensions, but not after the original return has already been filed. That sequencing can matter more than the relatively low state rate.
- Indiana DOR rates, fees and penalties (2026; 2026-09-12)
- Indiana DOR, PTET FAQ (2026; 2026-08-30)
- Indiana Information Bulletin 72B (2026; 2026-08-30)
- Indiana tax rates (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
IowaRead state analysis
Iowa
Back to comparison ↑The Iowa election uses 3.8% for 2026 under Iowa Code 422.16C(4) and 422.5. Election timing: Six months after the original IA 1065 or IA 1120S due date. Owner relief: Refundable owner credit equal to 96.2% of allocated 2026 PTET; excluded owner classes apply. Generally required above $1,000 of expected PTET after credits; filing extension does not defer payment.
An Iowa S corporation can elect on IA 1120S or through GovConnectIowa. The election deadline is six months after the original return due date, while late-payment and estimated-payment obligations can arise sooner.
- Iowa DOR 2026 income-tax rate announcement (2026; 2026-09-12)
- Iowa DOR PTET FAQ, sunset removed and election/credit rules (2026; 2026-09-12)
- Iowa Code 2026 section 422.16C: election, rate cross-reference and refundable credit (2026; 2026-09-12)
- Iowa Code 2026 section 422.5: 3.8% individual rate (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
KansasRead state analysis
Kansas
Back to comparison ↑The Kansas election uses 5.58% for 2026. Election timing: With the timely Form K-120S. Owner relief: Credit for eligible individual and trust owners; special trust limitations apply. Confirm payment due dates separately from the election deadline.
Kansas uses Form K-120S for the annual SALT Parity election. Trust ownership needs separate attention because an eligible trust generally cannot pass its PTET credit through to beneficiaries.
- Kansas DOR enacted individual tax schedule (2026; 2026-09-12)
- Kansas Notice 25-06: no 2026 rate reduction (2026; 2026-09-12)
- Kansas DOR, SALT parity FAQ (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
KentuckyRead state analysis
Kentucky
Back to comparison ↑The Kentucky election uses 3.5% for 2026 under the individual-rate cross-reference. Election timing: With timely Form 740-PTET under the filing-year instructions. Owner relief: 100% refundable allocated owner credit. Confirm payment due dates separately from the election deadline.
Kentucky LLET covers S corporations and LLCs while sole proprietorships and general partnerships generally lack that limited-liability tax treatment. The optional PTET and refundable qualifying-owner credit form a separate calculation.
- Kentucky DOR software developer tax-year updates (2026; 2026-09-12)
- Kentucky DOR, pass-through entities (2026; 2026-08-30)
- Kentucky Form 740-PTET (2026; 2026-08-30)
- Kentucky KRS 141.209: individual-rate election and 100% refundable credit (2026; 2026-09-12)
- Kentucky DOR limited liability entity tax (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
LouisianaRead state analysis
Louisiana
Back to comparison ↑The Louisiana election uses 3% for 2025 and later: statute ties elective entity rate to the individual rate. Election timing: Before or during the year, generally by the 15th day of the fourth month after year-end. Owner relief: Owner income exclusion rather than a dollar-for-dollar credit. Confirm payment due dates separately from the election deadline.
Louisiana uses Form R-6980 and Department acceptance for its continuing election. Owners receive an income exclusion rather than a dollar-for-dollar credit, making resident-state treatment and the tax base central to the comparison.
- Louisiana DOR individual income-tax reform rates (2026; 2026-09-12)
- Louisiana DOR, PTE election FAQ (2026; 2026-08-30)
- Louisiana DOR, elective PTE rate (2026; 2026-08-30)
- Louisiana Revenue Information Bulletin 23-022 (2026; 2026-08-30)
- Louisiana R.S.47:287.732.2 current elective entity rate and continuing election (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MaineRead state analysis
Maine
Back to comparison ↑The Maine election uses 7.15% on the qualified 2026 distributive-share base. Election timing: By the filing deadline, including extensions. Owner relief: Refundable credit equal to 90% of the owner share of PTET. Confirm payment due dates separately from the election deadline.
Maine’s new election should be evaluated alongside its new 2% high-income individual surcharge. A 90% credit is not a full refund of entity tax, and the remaining owner tax requires a combined calculation.
Source qualification: PTET: Payment arithmetic is supported by enacted law; implementation forms and filing procedures still need confirmation before an actual election.
- Maine Revenue Services revised 2026 individual rate schedules (2026; 2026-09-12)
- Maine Revenue Services, 2026 legislative changes (2026; 2026-08-30)
- Maine Legislature, enacted PTET text (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MarylandRead state analysis
Maryland
Back to comparison ↑The Maryland election uses 2026 individual-owner base: 8.75%; entity-member base: 8.25%. Election timing: 2026 special relief: the next filing or payment after April 15 controls; generally the second estimate. Owner relief: Owner credit subject to Maryland member and sourcing rules. Confirm payment due dates separately from the election deadline.
For 2026, Maryland disregards the first-quarter election and honors the next filing or payment after April 15, generally the second estimate. Owners should reconcile the entity credit with county tax and any separate capital-gains surcharge.
Source qualification: PTET: 2027 base computation requires its own future-year guidance.
- Maryland Tax-General section 10-105 (2026; 2026-09-12)
- Maryland Tax Alert 13, April 2026 PTET changes (2026; 2026-09-12)
- Maryland 2026 PTET estimated-payment alert (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MassachusettsRead state analysis
Massachusetts
Back to comparison ↑The Massachusetts election uses 5% Chapter 63D, with optional separate 4% Chapter 63E on each eligible owner’s excess over the surtax threshold. Election timing: With a timely original return, including extensions. Owner relief: Refundable owner credit equal to 90% of the allocated excise. Generally required when expected excise is $400 or more; calendar-year dates April 15, June 15, September 15, and January 15.
Massachusetts generally provides a refundable credit for 90% of allocated elective excise. A business owner facing the surtax needs the new Chapter 63E rules and transitional estimated-payment guidance, not only the older 5% election.
- Massachusetts DOR current tax rates (2026; 2026-09-12)
- Massachusetts DOR, elective PTE excise (2026; 2026-08-30)
- Massachusetts General Laws, Chapter 63E §2 (2026; 2026-08-30)
- Massachusetts DOR July 31, 2026: Chapter 63D/63E elections and 90% credits (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MichiganRead state analysis
Michigan
Back to comparison ↑The Michigan election uses 4.25% for 2026. Election timing: Generally the last day of the ninth month of the tax year (September 30 for calendar-year entities). Owner relief: Owner credit for the allocated Michigan flow-through entity tax. Confirm payment due dates separately from the election deadline.
A calendar-year Michigan entity generally elects by September 30 through Treasury Online. The multi-year commitment can matter when ownership, profitability or residence is expected to change.
- Michigan Treasury 2026 individual rate determination (2026; 2026-09-12)
- Michigan Treasury, flow-through entity tax FAQ (2026; 2026-08-30)
- Michigan Compiled Laws, Chapter 206 (2026; 2026-08-30)
- Michigan Treasury, 2026 individual rate (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MinnesotaRead state analysis
Minnesota
Back to comparison ↑The Minnesota election uses 9.85% of the elective PTE tax base. Election timing: By the extended return due date (September 15 for a calendar-year entity). Owner relief: Fully refundable owner credit. Confirm payment due dates separately from the election deadline.
Minnesota extended its elective regime only through tax year 2027. The qualifying-owner control test and the September 15 extended deadline for a calendar-year entity should be checked before treating the election as available.
- Minnesota DOR 2026 rates and brackets (2026; 2026-09-12)
- Minnesota DOR, pass-through entity tax (2026; 2026-08-30)
- Minnesota DOR, tax-law changes (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MississippiRead state analysis
Mississippi
Back to comparison ↑The Mississippi election uses Business schedule: 0% on first $5,000, 4% on next $5,000, 5% above $10,000; not the 4% personal rate. Election timing: During the year, by the return due date, or with the filed return, whichever is later under current guidance. Owner relief: 100% pro rata credit; excess may be refunded or carried forward at the owner’s election. Confirm payment due dates separately from the election deadline.
Mississippi uses Form 84-381 for the elective regime and generally requires more than 50% owner consent. Owners receive a pro rata credit and can elect a refund or carryforward of excess credit under the DOR FAQ. Regular S corporation franchise tax remains separate.
- Mississippi DOR general information, 2026 income tax (2026; 2026-09-12)
- Mississippi DOR, updated elective PTE FAQ (2026; 2026-09-12)
- Mississippi DOR 2025 PTE instructions: corporate-rate elective tax, not personal rate (2025; 2026-09-12)
- Mississippi DOR current business income and 2026 franchise rates (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MissouriRead state analysis
Missouri
Back to comparison ↑The Missouri election uses 4.7%: highest 2026 individual rate on the supplied qualified election base. Election timing: Follow the filing-year SALT Parity Act return procedure. Owner relief: 100% allocated nonrefundable credit, with unlimited carryforward. Confirm payment due dates separately from the election deadline.
An annual Missouri election can produce a credit that cannot be transferred to another taxpayer. Model how the actual owner will use the credit, especially when a sale or move could reduce future Missouri liability.
- Missouri DOR 2026 MO-1040ES tax rate chart (2026; 2026-09-12)
- Missouri DOR, SALT Parity Act FAQ (2026; 2026-08-30)
- Missouri DOR, entity tax FAQ (2026; 2026-08-30)
- Missouri Revised Statutes 143.436: highest-rate election and owner credit (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
MontanaRead state analysis
Montana
Back to comparison ↑The Montana election uses 5.65% for 2026; 5.4% for 2027. Election timing: With a timely Form PTE, including extensions (September 15 for a calendar-year entity). Owner relief: Fully refundable owner credit. Required when expected liability exceeds $500; calendar-year installments generally April 15, June 15, September 15, and January 15.
Montana permits a timely Form PTE election through extensions, generally September 15 for a calendar-year entity, but tax is generally due by the original March 15 deadline. The owner credit is refundable.
Source qualification: PTET: Entity eligibility can require judgment where an S corporation has instruments that may be treated as a second class of stock.
- Montana DOR HB 337 income-tax changes (2026; 2026-09-12)
- Montana DOR, pass-through entity tax (2026; 2026-08-30)
- Montana Form PTE instructions (2025; 2026-08-30)
- Montana Publication 1 to 2026 rates (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
NebraskaRead state analysis
Nebraska
Back to comparison ↑The Nebraska election uses 4.55% for 2026; 3.99% for 2027 and later years. Election timing: With Form PTET-E or the timely entity return, including extensions. Owner relief: Owner credit after the entity pays Nebraska PTET. Generally required when expected liability is $400 or more.
Nebraska allows a PTET-E election or the relevant entity-return election under current instructions. Distinguish the 2026 tax rate from the return’s filing year when forecasting owner distributions and estimates.
- Nebraska DOR 2026 Form 1040N-ES worksheet (2026; 2026-09-12)
- Nebraska DOR, PTET FAQ (2026; 2026-08-30)
- Nebraska DOR, PTET (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
NevadaRead state analysis
Nevada
Back to comparison ↑Nevada has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Nevada Commerce Tax generally becomes relevant when Nevada gross revenue exceeds $4 million. That is revenue, not profit; a low-margin company and a high-margin consultancy with the same owner income may have different exposure.
- Nevada Department of Taxation tax notes (2026; 2026-09-12)
- Nevada DOR modified business tax (2026; 2026-09-12)
- Nevada DOR commerce tax FAQ (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
New HampshireRead state analysis
New Hampshire
Back to comparison ↑New Hampshire has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
A New Hampshire S corporation requires a business-level model even when the shareholder wage-tax line is zero. Adding BPT and BET without the credit interaction can overstate tax; ignoring them can materially understate it.
- New Hampshire DRA interest and dividends tax repeal (2026; 2026-09-12)
- New Hampshire DRA business profits and enterprise taxes (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
New JerseyRead state analysis
New Jersey
Back to comparison ↑The New Jersey election uses Graduated: 5.675% through $250,000; 6.52% from $250,000 to $1 million; 10.9% above $1 million. Election timing: Electronic election with the original PTE-100 by March 15 for a calendar-year entity. Owner relief: Refundable owner credit under BAIT rules. Generally required when expected liability exceeds $400; April 15, June 15, September 15, and January 15 for calendar-year filers.
The New Jersey BAIT election is electronic and due by the original PTE-100 due date, generally March 15 after a calendar year. It cannot be made retroactively; a return filing extension does not extend that election deadline.
- New Jersey Treasury resident tax rate schedules, 2020 and after (2026; 2026-09-12)
- New Jersey Division of Taxation, BAIT (2026; 2026-08-30)
- New Jersey BAIT FAQ (2026; 2026-08-30)
- New Jersey PTE-150 instructions (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
New MexicoRead state analysis
New Mexico
Back to comparison ↑The New Mexico election uses 5.9% on the supplied qualified entity base. Election timing: With the entity return. Owner relief: Credit equal to allocated entity tax reported on RPD-41359; actual use follows owner rules. Confirm payment due dates separately from the election deadline.
New Mexico owner relief is reported through the PTE procedures. The research does not promise universal refundability of excess credits; the owner’s form and classification must support that treatment.
Source qualification: PTET: No claim of universal refundability; owner credit use must be reconciled.
- New Mexico TRD 2025 tax expenditure report: 2025-and-later income schedule (2026; 2026-09-12)
- New Mexico TRD January 2026 SB60 analysis: current-law comparison table (2026; 2026-09-12)
- New Mexico TRD, pass-through entity tax (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
New YorkRead state analysis
New York
Back to comparison ↑The New York election uses Graduated: 6.85% through $2 million; 9.65%, 10.30%, and 10.90% at higher PTET bases. Election timing: January 1 through March 15 of the tax year. Owner relief: Fully refundable owner credit. Generally due March 15, June 15, September 15, and December 15.
New York’s PTET base and election rules distinguish eligible S corporations and partnerships, and owner residence affects the analysis. The refundable owner credit is not a reason to ignore the early election or separate city regimes.
- New York 2026 IT-2105-I estimate schedules and benefit-recapture worksheets (2026; 2026-09-12)
- New York Tax Department, PTET (2026; 2026-08-30)
- New York PTET FAQ (2026; 2026-08-30)
- New York TSB-M-21(1)C,(1)I (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
North CarolinaRead state analysis
North Carolina
Back to comparison ↑The North Carolina election uses 3.99% for 2026. Election timing: With a timely entity return, including extensions. Owner relief: Owner deduction/exclusion for income taxed at the entity level; not a credit. Generally required when expected liability is $500 or more; calendar-year installments April 15, June 15, September 15, and December 15.
North Carolina’s timely entity-return election can extend with the return, but owner and entity eligibility restrictions remain important. A worksheet expecting a cash credit is the wrong model for this exclusion-based regime.
- North Carolina DOR individual rate schedules (2026; 2026-09-12)
- North Carolina DOR, elective PTET notice and FAQ (2026; 2026-08-30)
- North Carolina DOR: enacted 2026 3.99% rate and taxed-entity provisions (2023; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
North DakotaRead state analysis
North Dakota
Back to comparison ↑North Dakota has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
North Dakota provides composite filing and specific withholding exemption forms. Those procedures are not automatically an elective entity-level SALT workaround, and this research does not relabel them as a PTET program.
- North Dakota 2026 ND-1ES annual tax rate schedules (2026; 2026-09-12)
- North Dakota Tax Commissioner: S corporation and partnership income passes to owners (2026; 2026-09-12)
- North Dakota S corporation and partnership filing rules (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
OhioRead state analysis
Ohio
Back to comparison ↑The Ohio election uses 3% of qualifying taxable income. Election timing: With timely Form IT 4738. Owner relief: Refundable owner credit. Generally due April 15, June 15, September 15, and January 15.
An Ohio S corporation should reconcile IT 4738, the refundable owner credit and the owner’s business-income deduction. Municipal taxes and school-district income tax remain separate considerations.
- Ohio Revised Code chapter 5747, 2026 individual tax (2026; 2026-09-12)
- Ohio Revised Code §5747.38 (2026; 2026-08-30)
- Ohio Form IT 4738 instructions (2025; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
OklahomaRead state analysis
Oklahoma
Back to comparison ↑The Oklahoma election uses 2026 individual/trust members: 4.5%; corporation/partnership members: 4%. Election timing: Generally by the 15th day of the third month after the tax year begins, or with a timely original return under the post-2023 procedure. Owner relief: Owner excludes income included in the entity-level tax base. Confirm payment due dates separately from the election deadline.
Oklahoma’s election generally continues until revoked and provides an owner income exclusion. The election/revocation process and applicable owner-class rate should be checked before treating it as a uniform annual credit election.
- Oklahoma Tax Commission 2025 legislative update, effective 2026 (2026; 2026-09-12)
- Oklahoma Tax Commission, business tax help (2026; 2026-08-30)
- Oklahoma OTC 2026 PTE estimated worksheet: individual and entity-member rates (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
OregonRead state analysis
Oregon
Back to comparison ↑The Oregon election uses 9% on the first $250,000 of distributive proceeds; 9.9% above. Election timing: Timely Form OR-21, including extensions. Owner relief: Qualifying members claim the allocated PTE-E tax credit. For 2026 only, first and second installments both due June 15; remaining installments September 15 and January 15 after year-end.
An Oregon S corporation doing business in the state generally has a $150 minimum excise tax in addition to any elective PTE-E analysis. For 2026 the first two PTE-E estimated installments are both due June 15 under the extension relief.
- Oregon Legislative Revenue Office 2026 personal tax schedule (2026; 2026-09-12)
- Oregon DOR PTE-E tax, 2026 extension and payment relief (2026; 2026-09-12)
- Oregon 2026 chapter 75, SB1510 extension through 2027 (2026; 2026-09-12)
- Oregon DOR corporate filing requirements and S corporation minimum tax (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
PennsylvaniaRead state analysis
Pennsylvania
Back to comparison ↑Pennsylvania has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Pennsylvania separates income classes and uses PA-20S/PA-65 reporting. An ordinary pass-through owner result cannot be created by applying the C corporation rate to all S corporation profit.
- Pennsylvania DOR 2026 REV-413 individual estimated tax (2026; 2026-09-12)
- Pennsylvania DOR: ordinary S corporation income is taxed to shareholders (2026; 2026-09-12)
- Pennsylvania DOR partnership, S corporation and LLC tax treatment (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
Rhode IslandRead state analysis
Rhode Island
Back to comparison ↑The Rhode Island election uses 5.99%. Election timing: With the entity return and Schedule PTE under current instructions. Owner relief: Owner credit equal to 90% of allocated PTET under post-2024 rules. Confirm payment due dates separately from the election deadline.
Rhode Island requires the entity election and owner addback under its return instructions. Universal refundability is not asserted here because the owner class and current form must support it.
Source qualification: PTET: The current source did not support a universal refundability label for every owner class.
- Rhode Island Division of Taxation 2026 inflation adjustments (2026; 2026-09-12)
- Rhode Island DOR July 2026 enacted-law summary: surtax starts in 2027 (2026; 2026-09-12)
- Rhode Island 2025 RI-1065 instructions (2025; 2026-08-30)
- Rhode Island 2025 Schedule K-1 instructions (2025; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
South CarolinaRead state analysis
South Carolina
Back to comparison ↑The South Carolina election uses 3% of active trade or business income included in the election. Election timing: By the entity return due date, including extensions. Owner relief: Owner excludes income taxed at the entity level; no separate PTET credit. Confirm payment due dates separately from the election deadline.
South Carolina gives an owner exclusion for income taxed at the entity level rather than a separate PTET credit. Passive and investment items should be screened separately from active operating income.
- South Carolina DOR H.4216 2026 income-tax reform (2026; 2026-09-12)
- South Carolina Information Letter 22-4 (2026; 2026-08-30)
- South Carolina Form SC1120I (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
South DakotaRead state analysis
South Dakota
Back to comparison ↑South Dakota has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
The South Dakota sales/use-tax system requires a new license when a business changes legal organization in specified ways. A federal S election does not answer whether the operating transaction or reorganization changes state registration.
- South Dakota DOR sales and use tax guide (2026; 2026-09-12)
- South Dakota DOR sales and use taxation of services (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
TennesseeRead state analysis
Tennessee
Back to comparison ↑Tennessee has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Tennessee includes corporations and LLCs within its franchise/excise system unless an exemption applies. A regular operating S corporation therefore needs net earnings, net worth and exemption facts, not just the shareholder’s wage amount.
- Tennessee DOR Hall income tax repeal (2026; 2026-09-12)
- Tennessee DOR franchise and excise rates (2026; 2026-09-12)
- Tennessee DOR entities subject to franchise and excise taxes (2026; 2026-09-12)
- Tennessee franchise and excise tax manual, standard deduction (2025; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
TexasRead state analysis
Texas
Back to comparison ↑Texas has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Texas franchise tax follows its own taxable-entity and margin rules rather than federal S corporation pass-through treatment. Standard rates differ for qualifying retail/wholesale activity and other businesses.
- Texas Constitution article VIII section 24-a (2026; 2026-09-12)
- Texas Comptroller 2026 franchise report threshold and information filing (2026; 2026-09-12)
- Texas Comptroller franchise tax rates, 2026 and 2027 reports (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
UtahRead state analysis
Utah
Back to comparison ↑The Utah election uses 4.45% for 2026. Election timing: Last day of the entity tax year. Owner relief: Nonrefundable owner credit. Carryforward: 10-year carryforward. Confirm payment due dates separately from the election deadline.
Utah’s nonrefundable owner credit can carry forward up to ten years. All final individual taxpayers in the election are included; an owner with losses cannot simply opt out after the entity elects.
- Utah Tax Commission 2026 legislative summary (2026; 2026-09-12)
- Utah Tax Commission SALT report and tax FAQ (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
VermontRead state analysis
Vermont
Back to comparison ↑Vermont has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Vermont provides a simplified resident-only filing in qualifying cases and additional nonresident/composite procedures otherwise. Owner residence affects filing work, so one generic S corporation return assumption is insufficient.
- Vermont Joint Fiscal Office 2026 Fiscal Facts: personal income-tax brackets (2026; 2026-09-12)
- Vermont 32 VSA 5822: federal-AGI minimum tax (2026; 2026-09-12)
- Vermont Department of Taxes: resident-only entity returns and separate nonresident composite schedules (2026; 2026-09-12)
- Vermont Department of Taxes business entity income tax (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
VirginiaRead state analysis
Virginia
Back to comparison ↑The Virginia election uses 5.75%. Election timing: With the electronic Form 502PTET under filing-year instructions. Owner relief: Refundable owner credit. Quarterly estimated payments apply under Virginia PTET procedures.
Virginia uses electronic Form 502PTET. A return extension, owner eligibility and payment obligations are separate checks; the federal S election by itself does not make the state elective payment.
- Virginia Tax individual income-tax computation (2026; 2026-09-12)
- Virginia Tax, PTET (2026; 2026-08-30)
- Virginia Tax, PTET filing information (2026; 2026-08-30)
- Virginia Tax Commissioner Ruling 24-1 (2026; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
WashingtonRead state analysis
Washington
Back to comparison ↑Washington has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Washington generally applies B&O across legal forms, including S corporations and sole proprietors. A higher salary does not turn a gross-receipts tax into a net-profit tax, and city B&O can require a separate local review.
- Washington DOR individual income-tax FAQs (2026; 2026-09-12)
- Washington Governor: SB6346 income tax signed March 30, 2026; starts January 2028 (2026; 2026-09-12)
- Washington DOR service B&O rates and prior-year thresholds (2026; 2026-09-12)
- Washington DOR business tax classification definitions (2026; 2026-09-12)
- Washington DOR tiered capital-gains tax (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
West VirginiaRead state analysis
West Virginia
Back to comparison ↑The West Virginia election uses 4.58%: top 2026 individual rate on the qualified elective base. Election timing: With Form EPT-100; generally March 15 for a calendar-year entity. Owner relief: 100% allocated owner credit; excess carries forward up to five years under 11-21-3a(q). Carryforward: Up to five years. Calendar-year installments generally April 15, June 15, September 15, and January 15.
West Virginia makes the election through the filed PTE/EPT return and does not allow switching after the election. Its 2026 individual rate cut requires refreshing the EPT rate reference rather than continuing to use an older top-rate table.
- West Virginia Tax Division 2026 personal income-tax reduction (2026; 2026-09-12)
- West Virginia Tax Division, elective PTET (2026; 2026-09-12)
- West Virginia Code 11-21-3a: top-rate election and five-year owner carryforward (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
WisconsinRead state analysis
Wisconsin
Back to comparison ↑The Wisconsin election uses 7.9%. Election timing: On the timely entity return, including extensions. Owner relief: Owner excludes income taxed at the entity level; no separate credit. Confirm payment due dates separately from the election deadline.
Wisconsin’s S corporation election uses Schedule 5S-ET with more than 50% shareholder consent. Owners exclude the income taxed at the entity level; they do not receive a separate dollar-for-dollar PTET credit.
- Wisconsin DOR 2026 Form 1-ES instructions (2026; 2026-09-12)
- Wisconsin DOR, pass-through entity tax FAQ (2026; 2026-08-30)
- Wisconsin Schedule 3-ET instructions (2025; 2026-08-30)
- Wisconsin Schedule 5S-ET instructions (2025; 2026-08-30)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
WyomingRead state analysis
Wyoming
Back to comparison ↑Wyoming has no resident-owner elective PTET in the published 2026 scenario. Its incremental federal deduction opportunity from that election is $0, with no applicable election deadline or elective owner credit. Regular owner tax, mandatory business taxes, nonresident withholding and elections for income earned in other states remain separate.
Wyoming’s license tax uses assets located and employed in the state rather than owner salary or net profit. A $500,000 profit assumption alone cannot determine the fee for an asset-heavy business.
- State of Wyoming tax overview (2026; 2026-09-12)
- Wyoming Secretary of State annual license tax (2026; 2026-09-12)
- Census ACS housing, rent and property-tax data
- NAIC 2023 homeowner premium table
Taxstra methodologyScoring rules, financial assumptions and research limitations.
How Taxstra grades each state out of 10
This guide ranks one financial result, such as a tax bill or deduction. Lifestyle does not change that number. Other category tiles provide extra context and are labeled when they do not affect the overall score.
What does a score out of 10 mean?
For financial categories, 10 is the strongest result in the comparison and 1 is the weakest. Lower costs generally score better; higher pay scores better. A 7.9 is a comparison tool, not a promise about your finances.
Why can scores and ranks look different?
Cards show one decimal place, while rankings use two. Two states can both display 7.9 and still have slightly different ranks. States with the same ranking value share a rank.
Which WalletHub ranking do we use?
We use WalletHub’s Quality of Life category, not its overall ranking. For example, Illinois is fifth for Quality of Life and eighteenth overall in the cited study. Those are two different measures.
What if information is missing?
We leave it missing instead of guessing. If a required factor is unavailable, we label the score provisional and do not give it an overall rank.
Technical formulas and source definitions
- Financial categories: actual measurement spread
- The most favorable observed value receives 10 and the least favorable receives 1. Intermediate grades are scaled linearly between them: 1 + 9 × the favorable share of the observed range. Lower costs score higher; higher pay scores higher. If every observation is identical, each receives 5.5. These relative grades do not have a universal pass/fail cutoff. Extreme observations can widen the range and compress other grades. We do not narrow a genuine gap just to produce a tighter leaderboard; a change to a source population must have a documented measurement reason. The STR grade is a regional spending-cost screen. Hotel employment is excluded from its score because hotel jobs do not measure residential STR demand; actual occupancy and booking revenue require local property research.
- Malpractice and rental taxes: defined samples
- The physician index weights CMS county malpractice-cost observations by their malpractice RVUs within each state. It uses the underlying 2026 update, based on 2023 premiums and RVUs, before Medicare payment adjustments. State-specific specialty mix, missing insurer types and CMS imputation limit its use as a quote comparison. Apartment-tax comparisons hold building and fixture values constant and average the study’s named urban and rural municipalities equally. Including both reduces dependence on one city; it still does not represent all localities. They are neither statewide tax rates nor single-family STR bills.
- Quality of life: the source category, not the overall WalletHub rank
- We use the quality-of-life category of WalletHub’s 2026 state study, published August 10, 2026. Taxstra converts its rank to a grade using 1 + 9 × (50 − rank) / 49. The publisher’s category includes amenities, mobility, leisure, weather and environmental conditions. WalletHub’s overall ranking also includes affordability, economy, education and health, and safety. We use its narrower quality-of-life category as an amenities and daily-life input; our financial factors already measure costs separately. For example, Illinois is #5 in that category and #18 overall in WalletHub. Taxstra’s own guide ranking is a third, separately calculated result. Differences in these rank-based grades are not measured differences in happiness.
- Overall grade and rank
- Multiply each unrounded component grade by its published weight, add the results, then display one decimal place. Round the composite to two decimals for ranking and retain genuine ties at that precision. Cards display one decimal for readability; two cards displaying 7.9 can therefore have different positions. The table tooltip and downloadable dataset include the ranking value. For example, financial 6.0 and quality of life 9.0 produce 6.6 at 80% financial / 20% quality-of-life weights. Direct tax and deduction comparisons rank their displayed dollar outcomes and show a separate normalized category grade.
- Incomplete evidence
- Unavailable category data receives no grade. When a weighted component is missing, the remaining components are reweighted and the card labels the result provisional, shows evidence coverage and excludes it from the overall rank. The presence of a numeric provisional grade is not evidence that the missing category was measured.
- What a grade does not claim
- These are screening grades, not completed all-factor tax or legal rankings. The named tax benchmarks and CMS malpractice-cost index are included only where the displayed weights say so. Full-return taxes, individual insurance quotes and legal-policy judgments remain separate. A high amenities grade does not mean that everyone prefers the state. Family ties, local neighborhoods, climate preferences and a particular job can outweigh statewide observations.
For investment guides, livability describes market context; it does not forecast rent growth or returns and does not assume that the investor lives in the property’s state. In guides about tax bills, the tax calculations stay separate from lifestyle grades.
Financial comparisons preserve equal outcomes and leave unavailable calculations unranked. Statutes and election mechanics are factual comparisons, not subjective policy grades. These educational examples are not individualized tax advice.
Sources and measurement datesOriginal datasets, primary authority, verification dates and downloadable research.
Download the published 50-state dataset (CSV) · Dataset definitions and coverage
Economic observations were retrieved September 12, 2026. Measurement years differ because the agencies publish on different schedules. Existing retirement rules retain their August 4, 2026 review date; existing PTET and depreciation research retain August 30, 2026. Unresolved entries remain identified.
- Alabama Department of Revenue, electing pass-through entitiesSource year / applicable rules: 2026 · Verified 2026-08-30
- IRS Notice 2020-75, entity payments of state income taxesSource year / applicable rules: 2020 · Verified 2026-09-12
- IRS Publication 505, 2026 SALT deduction limitsSource year / applicable rules: 2026 · Verified 2026-09-12
- IRS: qualified business income deduction questions and answersSource year / applicable rules: 2026 · Verified 2026-09-12
- Alaska government tax factsSource year / applicable rules: 2026 · Verified 2026-09-12
- Arizona Publication 713, elective PTETSource year / applicable rules: 2026 · Verified 2026-08-30
- Arizona 2026 Form 120-PTE-WSource year / applicable rules: 2026 · Verified 2026-08-30
- Arkansas DFA, pass-through entity taxSource year / applicable rules: 2026 · Verified 2026-08-30
- Arkansas elective PTET ruleSource year / applicable rules: 2026 · Verified 2026-08-30
- Arkansas DFA 2026 special-session SB1 fiscal impactSource year / applicable rules: 2026 · Verified 2026-09-12
- Arkansas SB1, Act 2 of the 2026 special sessionSource year / applicable rules: 2026 · Verified 2026-09-12
- California FTB, pass-through entity elective taxSource year / applicable rules: 2026 · Verified 2026-08-30
- Colorado DOR, SALT Parity Act guidanceSource year / applicable rules: 2025 · Verified 2026-08-30
- Colorado 2026 Form DR 1705Source year / applicable rules: 2026 · Verified 2026-08-30
- Connecticut DRS current elective PTE eligibility, election and paymentsSource year / applicable rules: 2026 · Verified 2026-09-12
- Connecticut CT-PET December 2025 instructions: 6.99% tax and 87.5% owner creditSource year / applicable rules: 2025 · Verified 2026-09-12
- Connecticut General Assembly February 2026 tax expenditure report: PTE rate and creditSource year / applicable rules: 2026 · Verified 2026-09-12
- Delaware DOR: S corporation income passes to shareholders; nonresident estimated payments are personal taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Florida DOR individual income-tax FAQSource year / applicable rules: 2026 · Verified 2026-09-12
- Georgia DOR 2024 enacted legislation: HB1023 aligns electing entity and individual ratesSource year / applicable rules: 2024 · Verified 2026-09-12
- Georgia Rule 560-7-3-.03, PTE election and owner exclusionSource year / applicable rules: 2026 · Verified 2026-09-12
- Georgia DOR important tax updates, 2026Source year / applicable rules: 2026 · Verified 2026-09-12
- Hawaii Department of Taxation PTE rate, election and owner creditSource year / applicable rules: 2026 · Verified 2026-09-12
- Idaho State Tax Commission, pass-through entitiesSource year / applicable rules: 2026 · Verified 2026-08-30
- Idaho, 2026 ABE election-timing changeSource year / applicable rules: 2026 · Verified 2026-08-30
- Idaho Tax Commission business income tax rateSource year / applicable rules: 2026 · Verified 2026-09-12
- Illinois DOR, PTET election FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Illinois DOR, pass-through informationSource year / applicable rules: 2026 · Verified 2026-08-30
- Illinois FY 2027-01 bulletinSource year / applicable rules: 2026 · Verified 2026-08-30
- Indiana DOR, PTET FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Indiana Information Bulletin 72BSource year / applicable rules: 2026 · Verified 2026-08-30
- Indiana tax ratesSource year / applicable rules: 2026 · Verified 2026-08-30
- Iowa DOR PTET FAQ, sunset removed and election/credit rulesSource year / applicable rules: 2026 · Verified 2026-09-12
- Iowa Code 2026 section 422.16C: election, rate cross-reference and refundable creditSource year / applicable rules: 2026 · Verified 2026-09-12
- Iowa Code 2026 section 422.5: 3.8% individual rateSource year / applicable rules: 2026 · Verified 2026-09-12
- Iowa DOR 2026 income-tax rate announcementSource year / applicable rules: 2026 · Verified 2026-09-12
- Kansas DOR, SALT parity FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Kansas DOR enacted individual tax scheduleSource year / applicable rules: 2026 · Verified 2026-09-12
- Kansas Notice 25-06: no 2026 rate reductionSource year / applicable rules: 2026 · Verified 2026-09-12
- Kentucky DOR, pass-through entitiesSource year / applicable rules: 2026 · Verified 2026-08-30
- Kentucky Form 740-PTETSource year / applicable rules: 2026 · Verified 2026-08-30
- Kentucky KRS 141.209: individual-rate election and 100% refundable creditSource year / applicable rules: 2026 · Verified 2026-09-12
- Kentucky DOR software developer tax-year updatesSource year / applicable rules: 2026 · Verified 2026-09-12
- Louisiana DOR, PTE election FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Louisiana DOR, elective PTE rateSource year / applicable rules: 2026 · Verified 2026-08-30
- Louisiana Revenue Information Bulletin 23-022Source year / applicable rules: 2026 · Verified 2026-08-30
- Louisiana R.S.47:287.732.2 current elective entity rate and continuing electionSource year / applicable rules: 2026 · Verified 2026-09-12
- Louisiana DOR individual income-tax reform ratesSource year / applicable rules: 2026 · Verified 2026-09-12
- Maine Revenue Services, 2026 legislative changesSource year / applicable rules: 2026 · Verified 2026-08-30
- Maine Legislature, enacted PTET textSource year / applicable rules: 2026 · Verified 2026-08-30
- Maryland Tax Alert 13, April 2026 PTET changesSource year / applicable rules: 2026 · Verified 2026-09-12
- Maryland 2026 PTET estimated-payment alertSource year / applicable rules: 2026 · Verified 2026-09-12
- Massachusetts DOR, elective PTE exciseSource year / applicable rules: 2026 · Verified 2026-08-30
- Massachusetts General Laws, Chapter 63E §2Source year / applicable rules: 2026 · Verified 2026-08-30
- Massachusetts DOR July 31, 2026: Chapter 63D/63E elections and 90% creditsSource year / applicable rules: 2026 · Verified 2026-09-12
- Michigan Treasury, flow-through entity tax FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Michigan Compiled Laws, Chapter 206Source year / applicable rules: 2026 · Verified 2026-08-30
- Michigan Treasury, 2026 individual rateSource year / applicable rules: 2026 · Verified 2026-08-30
- Minnesota DOR, pass-through entity taxSource year / applicable rules: 2026 · Verified 2026-08-30
- Minnesota DOR, tax-law changesSource year / applicable rules: 2026 · Verified 2026-08-30
- Mississippi DOR, updated elective PTE FAQSource year / applicable rules: 2026 · Verified 2026-09-12
- Mississippi DOR 2025 PTE instructions: corporate-rate elective tax, not personal rateSource year / applicable rules: 2025 · Verified 2026-09-12
- Mississippi DOR current business income and 2026 franchise ratesSource year / applicable rules: 2026 · Verified 2026-09-12
- Missouri DOR, SALT Parity Act FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Missouri DOR, entity tax FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Missouri Revised Statutes 143.436: highest-rate election and owner creditSource year / applicable rules: 2026 · Verified 2026-09-12
- Missouri DOR 2026 MO-1040ES tax rate chartSource year / applicable rules: 2026 · Verified 2026-09-12
- Montana DOR, pass-through entity taxSource year / applicable rules: 2026 · Verified 2026-08-30
- Montana Form PTE instructionsSource year / applicable rules: 2025 · Verified 2026-08-30
- Montana Publication 1 to 2026 ratesSource year / applicable rules: 2026 · Verified 2026-08-30
- Nebraska DOR, PTET FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Nebraska DOR, PTETSource year / applicable rules: 2026 · Verified 2026-08-30
- Nevada Department of Taxation tax notesSource year / applicable rules: 2026 · Verified 2026-09-12
- New Hampshire DRA interest and dividends tax repealSource year / applicable rules: 2026 · Verified 2026-09-12
- New Jersey Division of Taxation, BAITSource year / applicable rules: 2026 · Verified 2026-08-30
- New Jersey BAIT FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- New Jersey PTE-150 instructionsSource year / applicable rules: 2026 · Verified 2026-08-30
- New Mexico TRD, pass-through entity taxSource year / applicable rules: 2026 · Verified 2026-08-30
- New York Tax Department, PTETSource year / applicable rules: 2026 · Verified 2026-08-30
- New York PTET FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- New York TSB-M-21(1)C,(1)ISource year / applicable rules: 2026 · Verified 2026-08-30
- New York Tax Department: PTET bases, tiers and owner creditSource year / applicable rules: 2026 · Verified 2026-09-12
- North Carolina DOR, elective PTET notice and FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- North Carolina DOR: enacted 2026 3.99% rate and taxed-entity provisionsSource year / applicable rules: 2023 · Verified 2026-09-12
- North Carolina DOR individual rate schedulesSource year / applicable rules: 2026 · Verified 2026-09-12
- North Dakota Tax Commissioner: S corporation and partnership income passes to ownersSource year / applicable rules: 2026 · Verified 2026-09-12
- Ohio Revised Code §5747.38Source year / applicable rules: 2026 · Verified 2026-08-30
- Ohio Form IT 4738 instructionsSource year / applicable rules: 2025 · Verified 2026-08-30
- Oklahoma Tax Commission, business tax helpSource year / applicable rules: 2026 · Verified 2026-08-30
- Oklahoma OTC 2026 PTE estimated worksheet: individual and entity-member ratesSource year / applicable rules: 2026 · Verified 2026-09-12
- Oregon DOR PTE-E tax, 2026 extension and payment reliefSource year / applicable rules: 2026 · Verified 2026-09-12
- Oregon 2026 chapter 75, SB1510 extension through 2027Source year / applicable rules: 2026 · Verified 2026-09-12
- Pennsylvania DOR: ordinary S corporation income is taxed to shareholdersSource year / applicable rules: 2026 · Verified 2026-09-12
- Rhode Island 2025 RI-1065 instructionsSource year / applicable rules: 2025 · Verified 2026-08-30
- Rhode Island 2025 Schedule K-1 instructionsSource year / applicable rules: 2025 · Verified 2026-08-30
- South Carolina Information Letter 22-4Source year / applicable rules: 2026 · Verified 2026-08-30
- South Carolina Form SC1120ISource year / applicable rules: 2026 · Verified 2026-08-30
- South Dakota DOR sales and use tax guideSource year / applicable rules: 2026 · Verified 2026-09-12
- Tennessee DOR Hall income tax repealSource year / applicable rules: 2026 · Verified 2026-09-12
- Texas Constitution article VIII section 24-aSource year / applicable rules: 2026 · Verified 2026-09-12
- Utah Tax Commission SALT report and tax FAQSource year / applicable rules: 2026 · Verified 2026-09-12
- Utah Tax Commission 2026 legislative summarySource year / applicable rules: 2026 · Verified 2026-09-12
- Vermont Department of Taxes: resident-only entity returns and separate nonresident composite schedulesSource year / applicable rules: 2026 · Verified 2026-09-12
- Virginia Tax, PTETSource year / applicable rules: 2026 · Verified 2026-08-30
- Virginia Tax, PTET filing informationSource year / applicable rules: 2026 · Verified 2026-08-30
- Virginia Tax Commissioner Ruling 24-1Source year / applicable rules: 2026 · Verified 2026-08-30
- Washington DOR individual income-tax FAQsSource year / applicable rules: 2026 · Verified 2026-09-12
- Washington Governor: SB6346 income tax signed March 30, 2026; starts January 2028Source year / applicable rules: 2026 · Verified 2026-09-12
- West Virginia Tax Division, elective PTETSource year / applicable rules: 2026 · Verified 2026-09-12
- West Virginia Code 11-21-3a: top-rate election and five-year owner carryforwardSource year / applicable rules: 2026 · Verified 2026-09-12
- West Virginia Tax Division 2026 personal income-tax reductionSource year / applicable rules: 2026 · Verified 2026-09-12
- Wisconsin DOR, pass-through entity tax FAQSource year / applicable rules: 2026 · Verified 2026-08-30
- Wisconsin Schedule 3-ET instructionsSource year / applicable rules: 2025 · Verified 2026-08-30
- Wisconsin Schedule 5S-ET instructionsSource year / applicable rules: 2025 · Verified 2026-08-30
- State of Wyoming tax overviewSource year / applicable rules: 2026 · Verified 2026-09-12
- Alabama DOR individual tax ratesSource year / applicable rules: 2026 · Verified 2026-09-12
- Arizona DOR individual withholding and tax rateSource year / applicable rules: 2026 · Verified 2026-09-12
- California FTB September 3, 2026 indexing memorandum, Attachment 2 (CalTax-hosted copy)Source year / applicable rules: 2026 · Verified 2026-09-12
- California FTB 2025 Publication 1067: individual-return 1% tax on excess over $1 millionSource year / applicable rules: 2026 · Verified 2026-09-12
- California FTB S corporation tax and minimum taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Colorado 2026 DR 0104EP estimate worksheetSource year / applicable rules: 2026 · Verified 2026-09-12
- Connecticut 2026 CT-1040ES: initial tax, 2% phaseout and recapture tablesSource year / applicable rules: 2026 · Verified 2026-09-12
- Delaware DOR employer guide, income computation tableSource year / applicable rules: 2026 · Verified 2026-09-12
- Delaware DOR gross receipts tax FAQSource year / applicable rules: 2026 · Verified 2026-09-12
- Delaware DOR LLC tax classificationSource year / applicable rules: 2026 · Verified 2026-09-12
- Florida DOR corporate income tax and S corporation filing exceptionsSource year / applicable rules: 2026 · Verified 2026-09-12
- Hawaii Department of Taxation tax-year rate tablesSource year / applicable rules: 2026 · Verified 2026-09-12
- Hawaii tax tables for years after December 31, 2024Source year / applicable rules: 2026 · Verified 2026-09-12
- Idaho Code 63-3024: 5.3% rate and statutory CPI indexingSource year / applicable rules: 2026 · Verified 2026-09-12
- BLS CPI-U U.S. city average: 2025 annual average 321.943Source year / applicable rules: 2025 · Verified 2026-09-12
- BLS historical CPI-U: 1998 annual average 163.0Source year / applicable rules: 1998 · Verified 2026-09-12
- Idaho Commission published annual tables: latest posted year 2025Source year / applicable rules: 2025 · Verified 2026-09-12
- BLS archived CPI files: October 2025 data unavailable during funding lapseSource year / applicable rules: 2025 · Verified 2026-09-12
- Illinois DOR current income-tax ratesSource year / applicable rules: 2026 · Verified 2026-09-12
- Indiana DOR rates, fees and penaltiesSource year / applicable rules: 2026 · Verified 2026-09-12
- Kentucky DOR limited liability entity taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Maine Revenue Services revised 2026 individual rate schedulesSource year / applicable rules: 2026 · Verified 2026-09-12
- Maryland Tax-General section 10-105Source year / applicable rules: 2026 · Verified 2026-09-12
- Massachusetts DOR current tax ratesSource year / applicable rules: 2026 · Verified 2026-09-12
- Michigan Treasury 2026 individual rate determinationSource year / applicable rules: 2026 · Verified 2026-09-12
- Minnesota DOR 2026 rates and bracketsSource year / applicable rules: 2026 · Verified 2026-09-12
- Mississippi DOR general information, 2026 income taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Montana DOR HB 337 income-tax changesSource year / applicable rules: 2026 · Verified 2026-09-12
- Nebraska DOR 2026 Form 1040N-ES worksheetSource year / applicable rules: 2026 · Verified 2026-09-12
- Nevada DOR modified business taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Nevada DOR commerce tax FAQSource year / applicable rules: 2026 · Verified 2026-09-12
- New Hampshire DRA business profits and enterprise taxesSource year / applicable rules: 2026 · Verified 2026-09-12
- New Jersey Treasury resident tax rate schedules, 2020 and afterSource year / applicable rules: 2026 · Verified 2026-09-12
- New Mexico TRD 2025 tax expenditure report: 2025-and-later income scheduleSource year / applicable rules: 2026 · Verified 2026-09-12
- New Mexico TRD January 2026 SB60 analysis: current-law comparison tableSource year / applicable rules: 2026 · Verified 2026-09-12
- New York 2026 IT-2105-I estimate schedules and benefit-recapture worksheetsSource year / applicable rules: 2026 · Verified 2026-09-12
- North Dakota 2026 ND-1ES annual tax rate schedulesSource year / applicable rules: 2026 · Verified 2026-09-12
- North Dakota S corporation and partnership filing rulesSource year / applicable rules: 2026 · Verified 2026-09-12
- Ohio Revised Code chapter 5747, 2026 individual taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Oklahoma Tax Commission 2025 legislative update, effective 2026Source year / applicable rules: 2026 · Verified 2026-09-12
- Oregon Legislative Revenue Office 2026 personal tax scheduleSource year / applicable rules: 2026 · Verified 2026-09-12
- Oregon DOR corporate filing requirements and S corporation minimum taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Pennsylvania DOR 2026 REV-413 individual estimated taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Pennsylvania DOR partnership, S corporation and LLC tax treatmentSource year / applicable rules: 2026 · Verified 2026-09-12
- Rhode Island Division of Taxation 2026 inflation adjustmentsSource year / applicable rules: 2026 · Verified 2026-09-12
- Rhode Island DOR July 2026 enacted-law summary: surtax starts in 2027Source year / applicable rules: 2026 · Verified 2026-09-12
- South Carolina DOR H.4216 2026 income-tax reformSource year / applicable rules: 2026 · Verified 2026-09-12
- South Dakota DOR sales and use taxation of servicesSource year / applicable rules: 2026 · Verified 2026-09-12
- Tennessee DOR franchise and excise ratesSource year / applicable rules: 2026 · Verified 2026-09-12
- Tennessee DOR entities subject to franchise and excise taxesSource year / applicable rules: 2026 · Verified 2026-09-12
- Tennessee franchise and excise tax manual, standard deductionSource year / applicable rules: 2025 · Verified 2026-09-12
- Texas Comptroller 2026 franchise report threshold and information filingSource year / applicable rules: 2026 · Verified 2026-09-12
- Texas Comptroller franchise tax rates, 2026 and 2027 reportsSource year / applicable rules: 2026 · Verified 2026-09-12
- Vermont Joint Fiscal Office 2026 Fiscal Facts: personal income-tax bracketsSource year / applicable rules: 2026 · Verified 2026-09-12
- Vermont 32 VSA 5822: federal-AGI minimum taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Vermont Department of Taxes business entity income taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Virginia Tax individual income-tax computationSource year / applicable rules: 2026 · Verified 2026-09-12
- Washington DOR service B&O rates and prior-year thresholdsSource year / applicable rules: 2026 · Verified 2026-09-12
- Washington DOR business tax classification definitionsSource year / applicable rules: 2026 · Verified 2026-09-12
- Washington DOR tiered capital-gains taxSource year / applicable rules: 2026 · Verified 2026-09-12
- Wisconsin DOR 2026 Form 1-ES instructionsSource year / applicable rules: 2026 · Verified 2026-09-12
- Wyoming Secretary of State annual license taxSource year / applicable rules: 2026 · Verified 2026-09-12
- BEA regional price parities, via FREDSource year / applicable rules: 2024 · Retrieved 2026-09-12
- Census ACS 1-year: B25077, B25103, B25064Source year / applicable rules: 2024 · Retrieved 2026-09-12
- NAIC homeowners report, HO-3 average premiumsSource year / applicable rules: 2023 · Retrieved 2026-09-12
- WalletHub 2026 quality-of-life categorySource year / applicable rules: 2026 · Retrieved 2026-09-12
The Quality of Life Rank column, not Overall Rank. Overall also includes affordability, economy, education and health, and safety. Illinois is #5 in the quality-of-life category and #18 overall. Category ranks are converted to Taxstra grades; overall ranks are shown only for source context.
The Census property-tax figure is a median dollar bill on owner-occupied homes, not a tax rate on rentals. BLS physician wages exclude self-employment. NAIC premiums describe owner-occupied HO-3 policies. CMS healthcare spending includes several payers and all ages. BLS accommodation employment includes hotels and other lodging; it is not STR revenue.
State-specific primary-authority links appear with each state. A source listed for one tax category does not verify a different category.
More questions about ptet & salt workarounds
Can an ordinary W-2 employee use PTET for salary?
The federal guidance concerns qualifying taxes imposed on and paid by partnerships and S corporations. A wage employee does not obtain an entity deduction merely by asking an employer to pay the employee’s state tax.
Does a 100% credit guarantee an economic benefit?
No. Federal deduction timing, QBI effects, state addbacks, owner residence and the cost of cash paid early still affect the comparison.
Why retain a specific review flag?
A conflict or missing material computation is identified on the affected state. Routine verified rates and deadlines are not subject to a generic approval gate.
Model the interaction
PTET can shrink QBI while increasing the federal state-tax deduction
Because the entity-level tax reduces pass-through business income, it generally reduces the qualified business income used for the Section 199A deduction. For an otherwise eligible owner receiving a 20% QBI deduction, each $10,000 of deductible PTET can reduce tentative QBI deduction by up to $2,000 before other limits. The trade can still be favorable, but use the net federal and state result.
| Entity-level PTET paid | $10,000 |
| Federal deduction before QBI interaction | $10,000 |
| Illustrative QBI reduction at 20% | ($2,000) |
| Net federal deduction base before other effects | $8,000 |
Simplified illustration only. It assumes the owner otherwise receives a full 20% QBI deduction and ignores taxable-income, wage/UBIA, SSTB, basis, loss, state, and timing effects.
The six-point PTET election screen
Entity eligible?
Confirm entity type, owners, and state-specific exclusions. A disregarded single-member LLC often cannot elect without a different tax classification.
Election available for 2026?
Check the state’s current statute, sunset, and filing-year instructions. Several regimes changed or expired around 2025 and 2026.
Election made on time?
Deadlines and payment prerequisites vary. Some elections are irrevocable after the due date or require estimates before the return.
Owner receives usable relief?
Model resident credit, nonresident credit, refundability, carryforward, addback, and owner-level inclusion.
Federal deduction creates net value?
Compare the federal benefit with reduced QBI, state credit haircut, cash timing, added compliance, and entity-owner mismatches.
Books and returns reconcile?
Entity payment, federal deduction, state addback, K-1 information, and owner credit should trace through one workpaper.
Election and payment deadlines are state-specific
Do not copy another state’s date. A regime may require a separate election, an election on the entity return, quarterly estimates, an early-year prepayment, owner consent, or payment by a specified date to preserve the federal deduction year. Late-election relief is not uniform.
Before year starts
Confirm entity/owner eligibility, expected source income, and state residency mix.
Before each estimate
Reforecast tax base, owners, apportionment, credits, and cash.
Before the election cutoff
Document authorization and verify that required payments have cleared.
Before federal filing
Reconcile books, deduction year, K-1 information, owner credits, and resident-credit positions.
How elections actually get blown
The same five failures account for nearly every broken PTET year we are asked to clean up:
- The missed prerequisite payment. Some regimes condition the election on a mid-year prepayment (California's June payment is the famous one). Miss it and discovering the problem in December is too late for that year.
- The missed election window. Annual-election states (New York's early-year window is the classic) do not accept the intention to elect; entities that never filed the election get no deduction no matter what they paid.
- Paying personal estimates as if PTET did not exist. The owner keeps full personal estimates running alongside entity PTET payments, doubling cash out the door and tangling the credit reconciliation at filing.
- Deduction-year mismatch on cash-basis entities. When the entity pays controls when the federal deduction lands; December versus January payments move real money for cash-basis S corps.
- Multi-state entities electing in one state and forgetting composite or withholding obligations in the others. The PTET fix in the home state does not switch off nonresident mechanics elsewhere.
Cleanup options exist for some of these (amended elections where a state allows them, deduction-year corrections, credit reconciliations), but every one of them is cheaper as a calendar entry than as a project. This is the core of what a year-round engagement does for PTET owners: the deadlines live on our calendar, not the client's memory.
Frequently asked questions
What is a PTET deduction?
A state pass-through entity tax lets an eligible partnership or S corporation pay state income tax at the entity level. Under IRS Notice 2020-75, qualifying entity-level payments may be deducted in computing federal taxable income and are not treated as the owners’ capped Schedule A SALT deduction.
Does every state offer a PTET election?
No. Availability, tax years, entity eligibility, and owner relief vary by jurisdiction, and some regimes have expired or changed. Use the source-linked 2026 state tracker on this page, then confirm the current filing-year instructions before electing or paying.
Does a single-member LLC qualify for PTET?
A disregarded single-member LLC usually is not an eligible pass-through entity by itself, although an LLC taxed as an S corporation or partnership may qualify if the state permits it. Entity classification and state owner restrictions control.
Does PTET reduce the QBI deduction?
An entity-level PTET deduction generally reduces the pass-through income used in the owner’s QBI calculation, so part of the federal SALT benefit may be offset by a smaller Section 199A deduction. The net result should be modeled, not assumed.
Is the owner credit always refundable?
No. State owner relief may be refundable, nonrefundable, carried forward, or provided as an income exclusion. Credit percentages and treatment of resident and nonresident owners vary by state.
Is PTET still useful after the SALT cap increased?
It can be, especially when an owner’s personal SALT taxes exceed the applicable cap or the higher cap is reduced by the income phaseout. But PTET can be neutral or harmful when owner credits are limited, QBI is reduced, cash timing is poor, or compliance costs consume the benefit.
Primary sources
Make the election from a net-benefit model
Taxstra can model the federal deduction, QBI reduction, owner credits, residency, estimates, cash timing, and state filing requirements before the election becomes irreversible.
Book a consultation