The Pass-Through Entity Elective Tax is a workaround for the State and Local Tax (SALT) $10,000 itemized deduction cap. Pass-through entities can pay the tax and in effect make the personal income tax an entity-level tax for federal purposes. The amount that must be paid is 9.3% of the entity's state taxable income.

To qualify to participate, an entity must pay the greater of $1,000 or 50% of the prior year's PTE tax total no later than June 15th of the current year. The balance of the PTE tax is due by March 15th of the following year (with no extensions). However, the payment is deductible from federal income tax only in the year in which the PTE tax is paid, so paying the balance of the tax (or an estimate of the balance) before December 31 will allow the deduction in the current year. Any overpayment will be refunded, any shortfall is due by March 15th.

We recommend that all payments be made electronically.

To make the Pass Through Entity Elective Tax Payment Online:

• Go to https://www.ftb.ca.gov and click on Pay.
• Under Make a payment, click on Bank account.
• Under Pay now, click on Use Web Pay business.
• Select your entity type and enter your state ID number (not the FEIN) and click Login.
• Enter your contact information and click Continue. Note that you may have to edit the entity name that the website presents to remove commas or limit the name to 30 characters.
• For S Corps only, select the tax form filed select Form 100, 100S, 100W or 100X and click Continue. (LLCs and Partnerships won't be asked this question.)
• Select payment type Pass-Through Entity Elective Tax (Form 3893) and click Continue.

• Enter the beginning and ending dates for the tax year, the amount of the PTE tax payment being made, and 
  the date the payment should be withdrawn and click Continue.

            * For the PTE mid-year tax deposit, this must not be later than June 15.

            * When paying the balance of the PTE tax, this date can be set as late as December 31, but must fall within 
               the current tax year in order deduct it on the current year tax return. If not paid in the current year, it must 
               be paid no later than March 15 of the following year (and won’t be deductible until the following year).

• Enter your banking information and click Continue.
• Review the information to confirm your entries, enter an email address (optional, but you should do it), and enter a phone number (mandatory).  Check the box to agree to the payment authorization and click Submit.
• Print a copy of the confirmation page, even if you got confirmation by email. The email doesn’t have all the information that is contained on the confirmation page.

IMPORTANT!

If you don’t see the confirmation number, the payment has NOT been set up.