California FTB Issues FAQs on Pass-Through Entity Elective Tax

The California Franchise Tax Board (FTB) Sept. 30 issued frequently asked questions (FAQs) on the pass-through entity (PTE) elective tax for individual income tax purposes. The FAQs include: 1) only qualified entities may make a PTE election to pay the entity-level elective tax and must make the election on its original and timely filed return; 2) only the pro rata or distributive share of income of consenting partners, members, or shareholders is included in the qualified entity’s qualified net income; 3) the PTE tax credit doesn’t reduce the amount of tax due below the tentative minimum tax; 4) the gain ...