ATX Not Supporting PTET - Pass Through Entity Tax - Best Options

[David Robinson]

After using ATX for 20+ years and waiting for Virginia Form 502PTET to appear (and it did not), ATX Tech Support has said that "the powers that be" decided that no PTET forms for any state would be supported by ATX and that an upgrade to one of their higher platforms would be necessary.  And my salesperson is not returning calls.  I have 15 Federal 1120s/1065s waiting to add Virginia Form 502PTET.  What is the best outcome here ?  What is everyone else doing?  And what do the higher plaforms cost?  Thank you.

[ILLMAS]

No worries, Proseries has the same problem, I’m working on a multi state partnership and so far I have used ATX for some forms and some manual forms.

[David Robinson]

Regretfully, Virginia mandates electronic filing for Virginia Form 502PTET and the manual forms shown on the internet are watermarked that they are only to be filed electronically.  The Virginia Form 502PTET instructions state that no waivers will be granted.  

 

[Abby Normal]

The "best" option would be for the states to just have one form that handles both PTE and PTET. MD started to do this but changed their mind and came up with a new separate form. Huge mistake.

[Lee B]

In Oregon, online filing was required. I had to enter the information into the Oregon Department of Revenue website.

The setup of the website was kinda confusing, fortunately the information required was limited.

[jklcpa]

It also looks like the payment had to be in by 4/15, so those S corps and partnerships now on extension would have had to pay this in order to claim it on the form in question. 

[ILLMAS]

3 hours ago, David Robinson said:

Regretfully, Virginia mandates electronic filing for Virginia Form 502PTET and the manual forms shown on the internet are watermarked that they are only to be filed electronically.  The Virginia Form 502PTET instructions state that no waivers will be granted.  

 

What did state say when you called them?

[David Robinson]

42 minutes ago, ILLMAS said:

What did state say when you called them? 

Virginia mandates electronic filing by one of their approved Vendors.  ATX is not one.  www.tax.virginia.gov/tax-preparation-software-elective-pass-through-entity-tax  Regretfully, Page 2 of the Virginia instructions "Form 502PTET and all associated schedules must be filed through the Federal/State eFile program. Paper submissions will not be accepted. Waivers of the electronic filing requirement will not be granted."   www.tax.virginia.gov/sites/default/files/taxforms/corporation-and-pass-through-entity-tax/2022/502ptet-package-2022.pdf  Unfortunately, Virginia does not have a fill in form available to the public. 

Edited May 4, 2023 by jklcpa
moved reply to outside of quote box

[BulldogTom]

You may be able to call a new vendor who is approved by VA, ask them to give you a deal on 2022 software so you can evaluate it and send these returns.   They may even have a conversion tool that will bring all your ATX files into their software.   Most sales people would love to get another sale on software that is not really in demand anymore.   I am assuming you have about 3 months to get all of this completed and while it is not ideal, you do have time to check out  what may become your new software product.

This really sucks - I would drop ATX and find a new provider if I was in your shoes.

Tom
Longview, TX

[David Robinson]

Thank you.  I finally got to someone in ATX sales and they are supposedly giving me a proposal to take me to a higher platform just so I can get my 10-15 Virginia S-Corps and LLCs done.  One of their highter platforms would have a license fee plus a pay per return.  I'd keep ATX but use the higher platform just for the PTET returns.  Seems horrible to shake loyal ATX customers down.

 

[michaelmars]

NY mandates you do it through there website.  NO paper or efile allowed

[David Robinson]

Looks like NY and Maryland are ahead - Virginia requires using commercial software.  Would have been so nice to be able to use a drop-in on a website.  New Jersey does a nice job of doing that, too.

[Medlin Software, Dennis]

Remember, is is not the people of the tax jurisdiction making the rules. It is the folks whose livelihoods depends on being parochial and complicated. This, no common form, and the caee of some, forcing use of certain products which likely pay fees to the agency involved. 

[Lynn EA USTCP in Louisiana]

I presume this discussion centers around the entity filing PTET and not the individual partner/shareholder taking the PTET credit on their pertinent state return.

 

[David Robinson]

Lynn EA - only for S-Corps and LLCs in Virginia that want to adopt PTET rules.  Virginia has a new pass-through entity form 502PTET with the 502PTET K-1 that has the pass-through credit.  In order to calculate and pay the VA PTET Tax and assign a pro-rata credit to a shareholder/member, both Virginia forms need to be filed electronically.  So--to your question--to assign the credit to a shareholder/member, the entity needs to file electronically.  If a shareholder/member GETS a 505PTET K-1 for Virginia, ATX supports that function on the 1040 series.

 

[NECPA in NEBRASKA]

Yippee! I did not retire soon enough. Nebraska just passed PTET rules AND made it retro to 2018. They don't expect to be able to have any of them filed before 12/31/23, so I will have a lot to look forward to in 2024. I would love to push my end date up a year. LOL Maybe I will win the lottery.

[Lion EA]

Make sure you charge enough for all the 2018-2022 amendments and prepare them on your own schedule to give you higher annual income this year and next. And, your 2023 prices will be higher, also, to take into account NE's new rules! Get those prices up over the next year before you sell your biz or your client list.

And, charge for tax planning as you look at the QBID on each biz return going forward to use the 2/7 rule. Charge a bunch to save your clients a bunch. Here's one article with an example: https://craykaiser.com/the-2-7-rule-for-wages-and-maximizing-qbi-deduction/

[Lee B]

I don't understand how they can make it retroactive to 2018?

Are your clients going to make PTET payments this year which will then be reflected on on amended 2018 to 2022 S Corp and PTS tax returns

followed by amended 2018 thru 2022 personal  tax returns.

First, you have already passed the date to amend 2018 and 2019 personal tax returns and receive refunds.

Second, most commentary on this subject says that in order for this to work the PTET payments are useable on cash basis., not on an accrual basis.

 

 

[Abby Normal]

Here's MD's list of approved vendors showing who supports the 511 PTET and who doesn't. I hadn't heard of some of these vendors. ATX is listed under Universal Tax Systems.

[Abby Normal]

On 5/4/2023 at 1:18 PM, jklcpa said:

It also looks like the payment had to be in by 4/15, so those S corps and partnerships now on extension would have had to pay this in order to claim it on the form in question. 

If they're cash basis, it had to be in by 12/31 last year to claim it on the federal business return. In MD if you pay it after year end, it distorts your state taxable income because you have to add it back to federal taxable income, but it wasn't deducted on the fed return.

[NECPA in NEBRASKA]

3 hours ago, cbslee said:

I don't understand how they can make it retroactive to 2018?

Are your clients going to make PTET payments this year which will then be reflected on on amended 2018 to 2022 S Corp and PTS tax returns

followed by amended 2018 thru 2022 personal  tax returns.

First, you have already passed the date to amend 2018 and 2019 personal tax returns and receive refunds.

Second, most commentary on this subject says that in order for this to work the PTET payments are useable on cash basis., not on an accrual basis.

 

 

I wish that I knew how this is going to work. What they released yesterday was that it would take the Department of Revenue a long time to get everything ready and do not anticipate that anything will be able to be filed until after 12/23 and has to be filed by 12/25. I have no idea if the numbskulls even talked to anyone remotely connected to taxes or accounting. If the state society had not sent out a blast last night, I would not know anything. They just lowered real estate taxes by adding a property tax credit to the income tax return that can only be figured out by going to a revenue website. I can't even tell you the number of emails and phone calls I've gotten for that since they passed it. No matter how many times I tell people that it is reducing their state income tax or return and point out the amount, they think that they didn't really get it or that it should have come off of their real estate taxes. 

[Medlin Software, Dennis]

Just made a big deposit towards this.  Even though I know how it works, I still have to do the math each year to prove it works.