How do I elect an Arizona partnership to pay passthrough tax at the entity level with a 1065 return using CCH® ProSystem fx® Tax and CCH Axcess™ Tax?
- Article Type:
- How To
- Last Modified:
- 03/27/2023
Objectives
Prepare and calculate passthrough entity tax for Arizona partnership.
Environment
- CCH® ProSystem fx® Tax
- CCH Axcess™ Tax
- Partnership - 1065
- Arizona - AZ
- Worksheet View - WSV
- Interview Forms
- Pass Through Entity Tax - PTE
Procedure
Election AZ165, page 1, Question A
Schedule E calculates the PTE tax liability based on partner count of each type (res/nonres and entity type) and their collected ownership percentage if they have or have not not opted out to pay at the entity level.
How do I indicate a specific partner has opted out?
120/165 EXT - Application for Automatic Extension of Time to File
120/165 EXT-E - Electronic Application for Automatic Extension of Time to File
Schedule F only populates in a PTE return.
Partnerships and S Corporations making the PTE election whose taxable income for the previous year exceeds $150,000 are required to make Arizona estimated tax payments - see instructions.
Optional Override
- Go to Common State > State PTE Generation worksheet > Line 3 (Interview PTE1, Box 38) - Arizona, select the checkbox.
- Or Arizona > Other Forms worksheet > Section 3 - AZ PTE Return > Line 1 (Interview Form AZ6, box 70) - Generate PTE Return, select the checkbox.
Schedule E calculates the PTE tax liability based on partner count of each type (res/nonres and entity type) and their collected ownership percentage if they have or have not not opted out to pay at the entity level.
How do I indicate a specific partner has opted out?
- Common State / City > Generic State Schedule K-1 Information worksheet > Expand Section 1 - State/City Information, line 1 (Interview Form ST-1, in Box 30) - State code, select AZ.
- In column Partner Number (Interview ST-1, Box 55), input applicable partner number(s).
- In column Code 1 (Interview ST-1, Box 123 - State Use Code), input X to select the Opt-out box on Arizona K-1: AZ PTE Pass-Through Election – Partner did not consent to PTE election.
- In column Checkbox 1 (Interview ST-1, Box 165 - X Box 1), select for Resident Part Year Schedule K-1. (Corporation partners, this selection is ignored and will prepare K-1(NR) per state form instructions)
- In column Checkbox 2 (Interview ST-1, Box 166 - X Box 2), select for Nonresident Part Year Schedule K-1(NR)
120/165 EXT - Application for Automatic Extension of Time to File
120/165 EXT-E - Electronic Application for Automatic Extension of Time to File
- Go to Extensions > Extensions worksheet > Section 2 - State Extension Information > Line 1 (Interview EXT-2, box 30) - Produce all state first extensions, select the checkbox.
- Or Grid 4 - Specific State Information - First Extensions, in column State Code (Interview EXT-2, Box 40) select AZ.
- If after 3/15, also select (Interview EXT-2, box 45) - X to Unlock.
Schedule F only populates in a PTE return.
Estimated Paid
- Go to Arizona Payments/Penalties worksheet > Section 1 - Tax Payments Composite.
- In Row Amount Paid (Interview AZ6, Boxes 76- 85), input applicable payment amounts.
- In Row Date Paid (Interview AZ6, Boxes 77-86), input applicable dates paid.
Extension Payment and Date
- Extension date and amount paid will fill automatically when extension exported for electronic filing. The state form does not allow government form (pink) overrides with return calculation.
Partnerships and S Corporations making the PTE election whose taxable income for the previous year exceeds $150,000 are required to make Arizona estimated tax payments - see instructions.
Optional Override
- Go to Arizona > Other forms worksheet > Section 3 - AZ PTE Return.
- In Line 3 (Interview AZ6, box 72) - Estimated Arizona tax liability - Tax Year 2023, input amount to control 120/PTE-W PTE, line 1.
- Extension and Return available with option to pay by direct debit. Informational diagnostics 38768 and 39552 will issue to confirm bank info setup properly.
- Estimates electronic filing not currently offered by Arizona partnership - 2023.
- Extension, Return and Estimates letters available.
Solution Id | 000257767/000257767 |
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