How do I input New York passthrough entity tax (PTET) in a 1065 return using  interview forms in CCH® ProSystem fx® Tax?

  • Article Type:
  • How To
  • Last Modified:
  • 11/05/2022

Objectives

To learn how to input New York passthrough entity tax (PTET) in a 1065 return using interview form in CCH® ProSystem fx® Tax.
 

Environment

  • CCH ProSystem fx Tax
  • 1065
  • Partnership
  • Interview  - IVF
  • New York
  • NY

Procedure

New York partnership return reports PTET information in four forms with CCH® ProSystem fx® Tax and CCH Axcess™ Tax:

  • PTET Worksheet
  • PTE Partner Information report
  • IT-204, page 9, line 144a-f
  • IT-204-IP, Item Q and Line 47a-f  (with partner entity types: Individual, Trust, Estate, and Grantor Trust)

There are two methods to preparing and populating the PTET credit:

Method 1: Automated calculation of PTET Worksheet and IT-204-IP credit

  1. Go to New York > NY2.
  2. In Box 70 - Opting to file PTET, select the checkbox to automate a PTE Worksheet calculation, based on other return input, and distribute the PTET credit to partners.
  3. Calculate the return.

Method 2: Override the credit distributable to the partners:

  1. Go to New York Form NY10 - New York Partners' Credit Information.
  2. In Box 60 - Other Passthrough Credit Bases and Factors - Code, select code 653.
  3. In Box 61 - Amount, input applicable credit amount.
  4. Calculate the return.

Notes

  • Special Allocation Code 34850 may be used to allocate the credit.
  • If using both Method 1 and Method 2, then the IT-204-IP, line 47a will not populate and the PTE Partner Information report column Direct share of PTET credit will not populate on release 2021.03000.
  • If special allocation 34850 input uses amounts totaling greater than the amount input with Method 2, then IT-204-IP will print incorrectly for partners. 
  • Partners coded as LLC - Disregarded Entity for Federal return will not receive a credit on their IT-204-IP by default. Remove the SMLLC partner Interview Form K-1, box 103-127 Entity Code of L, and their IT-204-IP will receive their portion of the credit, or utilize government form (pink) and line override for Disregarded entity partners.
  • IT-225, when prepared for a IT-204 return, will not include an addition code A-219, per state instructions, page 18: 
  • There is no PTET line on the IT-204-CP.
  • IT-225 addition code A-201 by default includes any state taxes paid deduction from the Federal return. The A-201 amount may need a NY4, boxes 30-31 input override as a control to not include New York taxes paid which are included in the PTET credit calculation.
  • The credit amount may be derived from the state / local tax deduction line on Form 1065, page 1, or the farm, rental or other schedule.
  • The G to i is work in process.
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