Income/Franchise:
Colorado DOR Issues Updated Implementation Guidance on Elective Pass-Through Entity Tax
Income Tax Topics: SALT Parity Act, Colo. Dept. of Rev. (rev. 6/23). The Colorado Department of Revenue issued updated administrative guidance addressing Colorado’s elective pass-through entity tax (PTET), which pursuant to legislation enacted in 2022 and 2021, applies to tax years commencing on or after January 1, 2018, but prior to January 1, 2026 [see previously issued Multistate Tax Alert for more details on the legislation]. The guidance summarizes how to make election, underlying filing requirements and tax calculations, estimated payment requirements and other tax compliance-related matters. Regarding the Internal Revenue Code (IRC) section 199A qualified business income (QBI) deduction for pass-through entities, the guidance explains that if a partnership or S corporation makes the Colorado PTET election, all of its partners or shareholders must add back to federal taxable income on their Colorado return any qualified business deduction claimed under IRC section 199A on their federal return; this addback is required for the full amount of the qualified business deduction claimed by the electing pass-through entity owner on their federal return. Please contact us with any questions.
30 Rockefeller Plaza New York, NY 10112-0015 United States
About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organization”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable only for its own acts and omissions, and not those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.
Deloitte provides industry-leading audit and assurance, tax and legal, consulting, financial advisory, and risk advisory services to nearly 90% of the Fortune Global 500® and thousands of private companies. Our professionals deliver measurable and lasting results that help reinforce public trust in capital markets, enable clients to transform and thrive, and lead the way toward a stronger economy, a more equitable society and a sustainable world. Building on its 175-plus year history, Deloitte spans more than 150 countries and territories. Learn how Deloitte’s approximately 415,000 peopleworldwide make an impact that matters at www.deloitte.com.
