Pass-Through Entity Tax Elections by State: One Table for 2026
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One table of state pass-through entity tax (PTET) elections for 2026: how to elect, the rate, the deadline that gets missed, and which states require estimates.
Since the federal cap on deducting state and local taxes, most states with an income tax have created a workaround for partnerships and S corporations. The business elects to pay state income tax itself, deducts it on the federal return, and the owners get a credit or exclusion on their state returns. The common name is a pass-through entity tax, or PTET.
The idea is the same everywhere. Almost nothing else is. Rates, election deadlines, estimate rules and the size of the owner credit differ from state to state, and a few deadlines come long before the return is due. This page collects the rules we've checked against each state's own tax agency in one table, and we add states as we verify them.
How to read the table
- Rate is the entity-level rate the state publishes for the year shown. Many states simply use their top individual rate, so the rate moves when the individual rate does.
- How to elect names the form or method. Some states treat filing the PTE return itself as the election.
- Deadline is the election or first-payment deadline, which is the one people miss. Where estimates are required, that's noted.
The table
| State | How to elect | Rate | Deadline and notes | Source |
|---|---|---|---|---|
| Alabama | Electing pass-through entity payment return (Form EPT) under Act 2021-1; composite on PTE-C | See ADOR instructions | PTE-C due with the federal return (March 15, 2026 for calendar 2025) | Alabama DOR |
| Arkansas | Form AR362-E, ATAP registration, or filing the PET return on time; return AR1100PET | 2025: 3.9% ordinary, 1.95% capital gains. 2026: 3.7% / 1.85% | Return due the 15th day of the 4th month after year end | Arkansas DFA |
| California | FTB 3804 with a timely original return; payments on FTB 3893 | 9.3% of qualified net income | First payment by June 15 of the election year; missing or shorting it cuts the owners' credit by 12.5% for 2026 through 2030 | California FTB |
| Connecticut | Check the box on CT-1065/CT-1120SI; Form CT-PET | Per the CT-PET form | Optional since 2024; annual, irrevocable election; due the 15th day of the 3rd month (March 15) | Connecticut DRS |
| Georgia | Schedules on Form 600S (S corporations) or Form 700 (partnerships), by the original or extended due date; irrevocable once that date passes | Individual rate for the year: 5.19% for 2025, 4.99% for 2026 | Disregarded single-member LLCs can't elect; owners subtract the income on Form 500 instead of taking a credit; no composite return in an election year; estimates like a C corporation | Georgia DOR HB 149 FAQ |
| Hawaii | Form N-362E, each year | 9% (2024 and later) | By the 20th day of the 4th month (April 20, 2027 for calendar 2026); members must be individuals, trusts or estates; estimates required | Hawaii DOTAX |
| Idaho | Affected Business Entity (ABE) election; tax on Form 41S or 65 with PTE-12 | Corporate rate | From July 1, 2026, the election can be made on any original return regardless of filing date | Idaho State Tax Commission |
| Illinois | Election on IL-1065 or IL-1120-ST; IL-516-I estimates | 4.95% | With the return; quarterly estimates; new base-method choice for partnerships for years ending on or after December 31, 2026 | Illinois DOR bulletin FY 2027-01 |
| Indiana | Annual election (check box on IT-20S/IT-65 for 2025, or Form IN-PTET); does not carry over | Individual rate for the year (3.00% for 2025) | With the return | Indiana DOR PTET FAQ |
| Iowa | Election on IA 1065/IA 1120S or in GovConnectIowa | 3.8% for 2025 | Election due six months after the original return due date; new election each year, binding once made | Iowa DOR |
| Kansas | Box N on Form K-120S; estimates on K-120ES | Highest individual rate for 2025 and later (5.58% for 2024) | Annual election with the return; estimates required since 2023 | Kansas DOR SALT Parity FAQ |
| Kentucky | Form 740-PTET; irrevocable for the year | Entity-level tax per instructions | Election and return by the 15th day of the 4th month (or extended due date) | Kentucky PTET instructions |
| Louisiana | Form R-6980 (terminate with R-6983) | Flat 3% for periods from January 1, 2025 | Composite filers can't elect; S corporations filing composite returns are barred from tax year 2026 | Louisiana Department of Revenue |
| Maine | Annual PTET return in the Maine Tax Portal only | 7.15% for tax years beginning in 2026 | New for 2026; members get a refundable credit of 90% of their share; return due the 15th day of the 3rd month (March 15, 2027 for calendar 2026) | Maine Revenue Services |
| Maryland | Box A on the first Form 510/511D, extension or return of the year; electing entities file Form 511 (Form 510 is the mandatory tax on nonresident members only) | 8.75% on individual members (6.50% + 2.25%), 8.25% on entity members | For 2026 only, the Comptroller ignores the box on the first-quarter payment and honors the choice made with the next filing after April 15, 2026. Resident members are taxed on Maryland income for 2026; the new resident calculation was pushed to 2027. Estimates if tax will exceed $1,000, with the last one due December 15 for S corporations and January 15 for partnerships | Comptroller of Maryland tax alert |
| Massachusetts | Form 63D-ELT with Form 355S or 3 | 5%; members get a 90% credit | Rules shown are for tax years 2021 through 2025; check the 2026 form before electing | Mass. DOR |
| Michigan | Flow-through entity (FTE) tax, elected by electronic payment | See Treasury | For tax years beginning in 2024 or later: elect by the last day of the 9th month after year end (September 30 for calendar filers); estimates if liability will exceed $800 | Michigan Treasury |
| Minnesota | Election by the extended due date (calendar 2025: September 15, 2026); Schedule PTE | Highest individual rate, currently 9.85% | Available for tax years beginning before January 1, 2028; no late elections; 2026 electors make four equal, on-time estimates; owners get a refundable credit | Minnesota DOR |
| Mississippi | Check "Electing Pass-Through Entity" on Form 84-105 | 2025: 0% on the first $5,000, 4% on the next $5,000, 5% over $10,000 | Per the 84-100 instructions | Mississippi DOR |
| Missouri | Form MO-PTE (election on the return) | Entity-level tax; members claim the SALT Parity credit | With MO-PTE | Missouri DOR SALT Parity FAQ |
| Nebraska | Form PTET-E or Box 5 on Form 1065N/1120-SN | 5.20% (2025), 4.55% (2026), 3.99% (2027 and later) | By the return filing date including extensions | Nebraska DOR PTET FAQ |
| New Jersey | Business Alternative Income Tax (BAIT), Form PTE-100 | Graduated BAIT rates | March 15, 2027 for calendar 2026 | NJ PTE-100 instructions |
| New Mexico | Complete the entity-level computation on Form PTE | Higher of the personal or corporate rate, currently 5.9% | Annual election, that year only | New Mexico TRD |
| New York | Online opt-in, annual | See the PTET pages | Elect January 1 to March 15; estimates March 15, June 15, September 15, December 15; irrevocable after the first estimate due date | NY Tax Department |
| North Carolina | Taxed PTE election on D-403 or CD-401S | Individual rate for the year | Elect on a timely filed return, extensions included | NCDOR notice |
| Rhode Island | Schedule PTE with RI-1065 or RI-1120S | 5.99% | Owner credit is 90% of tax paid for years beginning in 2025 or later; electing entities skip nonresident withholding; sole proprietors may elect | Rhode Island Division of Taxation |
| Utah | SALT Report TC-75, filed and paid electronically | Individual rate times voluntary taxable income | Payment by the last day of the entity's tax year (December 31 for calendar years); irrevocable once paid | Utah State Tax Commission |
| Virginia | Form 502PTET (electronic) | 5.75% of eligible owners' share | Elect by the return due date including extensions; 2026 is the last year | Va. Code 58.1-390.3 |
| West Virginia | Filing Form EPT-100 is the election; owners claim the EK-1 credit | Top individual rate (4.82% for 2025) | Calendar year: March 15 (extended September 15); estimates April 15, June 15, September 15, January 15 | West Virginia Tax Division |
Still being checked: Arizona, Colorado, Montana, Ohio, Oklahoma, Oregon, South Carolina and Wisconsin. States with no income tax on individuals, like Texas and Florida, don't need one. We only add a row after reading the state's own page; confirm the current year's form before you elect.
Four things that trip people up
1. Some deadlines come early. California's first payment is due June 15 of the year you're electing for. Utah's payment is due by December 31. New York's election closes March 15. Michigan, Minnesota and Iowa run the other way, with deadlines months after year end. Put the election date on the calendar in January, not when the return is being prepared.
2. The election is usually yearly, and often can't be undone. Indiana's doesn't carry over. Iowa's is binding once made. Connecticut's is irrevocable for the year, and New York's becomes irrevocable after the first estimate due date.
3. Estimates may be required. Kansas, Hawaii, Illinois, New York, Minnesota and West Virginia all expect estimated payments from electing entities. Missing them brings penalties at the entity level, even though the owners get the credit.
4. The owner credit isn't always 100%. Maine, Massachusetts and Rhode Island give owners 90%. California's credit shrinks by 12.5% if the June 15 payment is missed. The election is worth it in most cases, but run the numbers when a state gives back less than it takes.
A worked example
Two equal partners run a Nebraska partnership that earns $400,000 in 2026. If it elects, the partnership pays 4.55% at the entity level: $400,000 x 4.55% = $18,200. That $18,200 is deducted on the federal partnership return, so each partner's federal share of income falls by $9,100. At a 24% federal bracket, that's about $2,184 less federal tax per partner. Each partner then claims a credit for their $9,100 share of the tax on their Nebraska return. If the same business waits until 2027, the rate drops to 3.99%, which means a smaller deduction and a smaller credit. The election still saves federal tax, but by less.
FAQ
Does every state have a PTET?
No. States without a personal income tax have no reason for one, and a few states with an income tax haven't adopted one or have set an end date. Virginia's ends after 2026, and Minnesota's covers tax years beginning before 2028.
Can a single-member LLC elect?
Usually only if it's taxed as an S corporation or partnership. Hawaii, for example, allows a single-member LLC only if it's taxed as an S corporation. Rhode Island is unusual in letting sole proprietors elect.
Does electing change what the owners file?
Owners still file their own state returns. They report their share of the entity's tax as a credit (or, in some states, an exclusion), using the schedule the state provides.
What if the business has owners in several states?
Each state's election covers income taxed by that state. Owners living elsewhere may also need a credit from their home state for tax paid to another state, which depends on the home state's rules.
This page is general information, not tax advice for your situation. We track these elections for partnerships and S corporations in several states, and this table is the reference we update as rules change. Related: our guides to the Connecticut and North Carolina elections.