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June062022

Important Pass-Through Entity Tax Deadlines

Sarah S. Kim, J.D., LL.M.

06.06.22 | SALT Chat

Following up on my earlier blog Pass-Through Entity Tax Election – Don’t Wait Until Next Year to Decide, here are quick reminders for upcoming deadlines for the Pass-Through Entity Tax (PTET) in key states.

New York

New York recently extended the 2022 election deadline until September 15, 2022. An eligible pass-through entity (PTE) that missed the original March 15, 2022 deadline has a second chance to participate in the PTET. To have a valid election under the extended deadline, however, an electing PTE must make a required estimated payment with the election. For example, an entity making an election after March 15, 2022, and before June 15, 2022, should pay 25% of the required annual payment. To learn more about the required estimated PTET payment, see this article.

New Jersey

New Jersey extended the 2021 Business Alternative Income Tax (BAIT) election deadline until June 15, 2022. For a calendar-year taxpayer, the 2021 BAIT election and return were originally due on March 15, 2022. An eligible PTE still has an opportunity to elect into the NJ BAIT for the 2021 tax year. In addition, the 2022 estimated BAIT payment due date that fell between March 15, 2022, and June 15, 2022, has been extended to June 15, 2022.

California

To be eligible to make the California PTET election for the 2022 tax year, a qualified PTE must make an estimated tax payment on or before June 15, 2022. The payment must be the greater of 50% of the elective tax paid during the 2021 year or $1,000. If the PTE making an election for 2022 did not opt in to the 2021 PTET, the electing PTE is required to pay $1,000 by June 15, 2022. Failure to make this June payment will render PTEs ineligible to make the election for the 2022 tax year.

If you need assistance with making a 2022 PTET election or need advice on the PTET in general, please feel free to contact me at 646.346.6467 | skim@berdonllp.com or reach out to your Berdon tax advisor.

Sarah S. Kim is a Senior Tax Manager in Berdon LLP’S State and Local Tax Group with nearly 10 years of professional experience. Sarah advises Fortune 500 and middle market businesses across an array of industries. She has experience with various types of taxes, including corporate income and franchise tax, sales and use tax, personal income tax, unincorporated business tax, commercial rent tax, and real estate transfer tax.

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