The pass-through entity must make the election to be treated as an Electing Pass-Through Entity by submitting the Pass Thru Entity Election, Form PTE-E, online via My Alabama Taxes at any time during the tax year or on or before the 15th day of the third month following the close of that tax year for which the entity elects to be taxed as an Electing Pass-Through Entity. Once logged into My Alabama Taxes, go to the Pass-Through Entity account and click on the Form PTE-E-Update Pass Through Entity Election Status link. The taxpayer will then follow the instructions to make the election. The election is binding for that year and all subsequent tax years unless the entity properly elects to no longer be taxed as an Electing Pass-Through Entity. Please note there is no paper equivalent of this online election.
The election shall be accomplished by a vote by or written consent of the members of the governing body of the entity as well as a vote by or written consent of the owners/shareholders holding greater than 50 percent of the voting control of the entity, within the time prescribed above.
For tax years beginning on or after January 1, 2021, any Alabama S corporation, as is defined by §40-18-160, Code of Ala. 1975, and any Subchapter K Entity as is defined by §40-18-1, Code of Ala. 1975, may elect to be taxed as an Electing Pass-Through Entity.
Yes, any Alabama S corporation, as is defined by §40-18-160, Code of Ala. 1975, and any Subchapter K Entity as is defined by §40-18-1, Code of Ala. 1975, may elect to be taxed as an Electing Pass-Through Entity.
Yes, an overpayment from the prior year’s composite return can be transferred to an Electing pass through entity’s account.
No, if an entity elects to be treated as an Electing Pass-Through Entity, the composite return is not required. If an election is not made, partnerships are required to make a composite payment in accordance with §40-18-24.2, Code of Ala. 1975.
All credits except the 2017 Alabama Historic Rehabilitation Tax Credit and the Railroad Modernization Act Credit shall pass through to and may be claimed by an eligible taxpayer.
The Electing Pass-Through would complete Schedule PC. The amounts entered on the Schedule PC will carry over to the Schedule K and K-1s. Many credits now must be claimed on the taxpayer’s My Alabama Taxes account to receive the credit and the Schedule PC attached to Form 65 or 20S. For more information on credits, please visit ALDOR’s Tax Incentives page and see instructions for Schedule PC.
The 2017 Alabama Historic Rehabilitation Tax Credit and the Railroad Modernization Act Credit must be claimed at the Electing Pass-Through Entity level and will not be passed through to the partners of the entity.
ALDOR requires the use of Schedule EPT-C, when claiming tax credits. The schedule allows the taxpayer to compute the total amount of tax credits allowable. The amounts entered on the Schedule EPT-C will carry over to the Form EPT, page 1. Many credits now must be claimed on the taxpayer’s My Alabama Taxes account to receive the credit and the Schedule EPT-C attached to Form EPT. For more information on credits, please visit ALDOR’s Tax Incentives page and see instructions for Schedule EPT-C.
