How do I prepare Iowa PTE-C with a 1065 return using CCH® ProSystem fx® Tax and CCH Axcess™ Tax?

  • Article Type:
  • How To
  • Last Modified:
  • 02/08/2024

Objectives

Generate and populate Iowa Composite return tax calculation and payment voucher.

Environment

  • CCH® ProSystem fx® Tax
  • CCH Axcess™ Tax
  • Partnership - 1065
  • Iowa - IA
  • Worksheet View - WSV
  • Interview Forms
  • Pass Through Entity Tax - PTE

Procedure

Pre-requisites

  • Go to Common State > State PTE Generation worksheet > line Iowa (Interview PTE-ST1, Box 90) select the checkbox.
    • Tax Year 2022 and forward.
  • Or Iowa > PTE-C Composite Return worksheet > line X to Generate PTE Return, select the checkbox (Interview Form IA6,  box 48).
    • Tax Year 2022 only.
  • Go to  Partners > Partner Information worksheet:
    • Only Non-Resident partners (entity types: I, C, P, A, S, E, T, G, M, L, N, R, K, Q) are included with the PTE-C; 
    • In column Residency - column State if Different (Interview Form K-1, box 75-96), select applicable state other than IA.

Note: If all partners are non-resident entities, and no individuals, then PTE-C, part 3, lines i-v must be manually answered Yes with input at Iowa > 1040C Composite return worksheet > Section 1 > Lines 9-12 (Interview IA6, boxes 47, 42, 45, 46).

Partner Opt-out
How do I indicate a specific partner has opted out? 

  1. Partners > Partner Information State Specific worksheet > Expand Section 7 - Iowa (Interview IA6).
  2. In column Partner Number (Interview IA6, Box 50), input applicable partner number(s).
  3. In Column Form Code (Interview IA6, Box 51- Composite Code, select option 4), select Exclude from IA PTE-C.

Note: Partners excluded will still be listed on the PTE-C, page 3, but will have code NMA in column F - Exemption Code (if applicable).

Extension

  • Iowa grants an automatic extension of time to file. See state instructions to verify your client qualifies.

PTE-C Composite Tax Payment Voucher IA 96-048

  • Prepared if PTE-C, page 1, line 1, and/or page 3, line 3, calculates an amount due.

PTE-C Tax Prepayments

  • Line 6 - per line and form instructions, should be zero for tax year 2022.
  • Line 7 - Iowa > 1040C - Composite Return worksheet > Line 14 (Interview Iowa > IA6, box 135).

PTE-C Next Year Estimates
Not applicable at this time.

Electronic Filing

  • Return available for electronic filing. Input fields which interact with PTE-C electronic filing: 
    • General > Electronic Filing worksheet > Section 1 - General > Line 6 - File other returns electronically.
      • Interview Form EF-1, box 35 - File other returns electronically.
    • General > Electronic Filing worksheet > Section 5 - State Electronic Filing Options > Line 58 - File Iowa PTE Return.
      • Interview Iowa > IA6, box 141.
  • Direct debit is not currently accepted. 

Filing Instructions

  • Extension, and Return letters available. Extension letters will only mention that the state grants an automatic extension to file. 

Additional Information

IA instructions https://tax.iowa.gov/sites/default/files/2023-01/2022IAPTE-CInstructions%2841176%29.pdf
"For purposes of the Iowa Composite Return, nonresident members include partners in a partnership, members of a limited liability company taxed as a partnership or S corporation, shareholders of an S corporation, or beneficiaries of a trust or estate who are any of the following:
• An individual who is not a resident of Iowa
• A partnership without a commercial domicile in Iowa
• A trust or estate without a situs in Iowa
• A C corporation or S corporation without a commercial domicile in Iowa
• A financial institution without a commercial domicile in Iowa
Any partner, shareholder, or beneficiary whose state of residence, commercial domicile, or situs, as applicable, is not known by the pass-through entity shall be considered a nonresident member."
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