Maximize California PTET savings with strategic election and compliance planning.
California's Pass-Through Entity Tax (PTET) remains one of the most significant state tax planning opportunities available to owners of partnerships, LLCs taxed as partnerships, and S corporations. Originally enacted as a response to the federal limitation on individual state and local tax (SALT) deductions, California's PTET regime has now been extended through tax years beginning before January 1, 2031, creating continued planning opportunities for taxpayers and their advisors.Under the PTET regime, eligible pass-through entities may elect to pay California tax at the entity level, allowing eligible owners to receive a corresponding California tax credit while potentially obtaining a federal deduction that would otherwise be limited under the SALT deduction rules. Although the mechanics appear straightforward, determining whether the election is beneficial requires careful consideration of owner eligibility, qualified net income calculations, credit utilization, withholding obligations, estimated tax payment requirements, and interactions with other California tax provisions. This course provides tax professionals with a practical overview of California's PTET rules, recent legislative developments, election procedures, and planning opportunities. Participants will learn how to identify taxpayers who may benefit from the election, navigate compliance requirements, evaluate common pitfalls, and advise clients regarding annual election decisions in an evolving federal and state tax environment. Whether advising closely held businesses, high-net-worth individuals, or multistate taxpayers, practitioners will gain the knowledge needed to confidently address client questions and implement effective PTET strategies.
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
California Pass-Through Entity Tax Background
- Understand the History and Development of the PTET Regime and Its Relationship to the Federal Salt Deduction Limitation
- Quantify the Federal Tax Benefits and Potential Economic Impact of Making a PTET Election
- Review Recent California Legislative and Administrative Developments Affecting PTET Elections Through 2030
- Analyze Current IRS Guidance and the Continuing Viability of State PTET Workarounds
Identifying Taxpayers Who Can Benefit From the California PTET
- Determine Which Entities and Owners Qualify for the California PTET Election
- Calculate Qualified Net Income (QNI) and Identify Common Calculation Errors
- Evaluate the Advantages and Disadvantages of the Election for Resident and Nonresident Owners
- Understand the Impact of PTET Elections on California Tax Credits and Other State Tax Attributes
Planning Opportunities and Potential Pitfalls
- Review Multi-Tier Entity Structures, Flow-Through Entity Considerations, and Credit Allocation Issues
- Analyze Nonresident Owner Considerations, Composite Return Issues, and Withholding Requirements
- Understand How the California PTET Interacts With California Minimum Tax Provisions and Estimated Tax Payment Requirements
- Identify Common Compliance Errors and Planning Opportunities for Closely Held Businesses
- Evaluate Whether Annual Elections Should Be Made in Light of Changes to Federal and State Tax Law
PTET Election Mechanics and Compliance
- Identify Election Requirements, Deadlines, and Payment Procedures
- Understand Recent Changes to PTET Prepayment Rules and Their Impact on Electing Entities
- Learn How the PTET Is Reported on Entity and Individual Income Tax Returns
- Analyze Timing Issues Associated With PTET Deductions for Cash- and Accrual-Basis Taxpayers
- Review Best Practices for Documentation, Owner Consents, and Administrative Compliance
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on July 9, 2026.
Call 1-866-352-9540 for further credit information.
- AIPB 1.5
- This program is acceptable for 1.5 CPEC(s) towards the CB designation through the American Institute of Professional Bookkeepers (AIPB).
- CA MCLE 1.5
- Lorman Education Services/Noggin Guru is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hour(s) of participatory credit.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
MP3 Download
- CA MCLE 1.5
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Marc Armstrong
Gerber Kawasaki
- Tax Director
- Focus on working with high-net-worth individuals and small businesses
- Speaker on various topics, including Tax Options for Developing and Selling Appreciated Land
- Publshed Author
- CPA, CFP, and CFA charter holder
- Master’s degree in business taxation, University of Southern California; B.S. degree in accounting and business administration
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
All of your training, right here at Lorman.
Pay once and get a full year of unlimited training in any format, any time!
- OnDemand Courses
- Live Webinars
- MP3 Downloads
- Course Manuals
- Executive Reports
- White Papers and Articles
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- State Specific Credit Tracker
- All-Access Pass Course Concierge
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