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Tag: SALT Cap Workaround
Paying the CA PTET Voucher: Exact Form 3893 Walk-Through for 2025
Legal & Technical Authority State Law: California Revenue & Taxation Code §§ 19900-19906 (AB 150, SB 113) require two pass-through entity elective tax (PTET) payments—one during the tax year and one with the return. Federal Context: PTET shifts the state tax to entity level, making it deductible under IRC § 162 and sidestepping the SALT […]
S-Corp vs. LLC in California — Franchise Tax and PTET Compared for 2025
Statutory Snapshot LLC: California Revenue & Taxation Code (R&TC) §§ 17941 ($800 annual tax) and 17942 (gross-receipts fee). Federal entity classification follows IRC § 7701 and Reg. § 301.7701-3. S-Corp: R&TC § 23802 imposes a 1.5 percent tax on net income (minimum $800). Federal rules are in IRC §§ 1361–1362. PTET (either entity): R&TC §§ […]
Pass-Through Entity Elective Tax (PTET) 2025: 9.3 % or Nothing?
Statutory Snapshot Law: California Revenue & Taxation Code §§ 19900 – 19906 (originally AB 150; expanded by SB 113). Rate: Flat 9.3 % of each consenting owner’s California-source income in the entity. Years Available: Tax years 2021 → 2025 (sunsets before 1-1-2026 unless Congress lifts the federal $10 k SALT cap). Federal Context: Designed to […]