Connecticut issues Pass-Through Entity Tax guidance; questions remain

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September 2018


On August 21 and June 19, the Connecticut Department of Revenue Services issued guidance regarding the Pass-Through Entity Tax (PE Tax), applicable to tax years beginning on or after January 1, 2018.  The August and June documents discuss the alternative tax bases, the combined return election, estimated payments, and mechanics around the tax credit.

The takeaway

Taxpayers should consider the impact of the above provisions in determining their PE Tax as well as the impact on estimated payment requirements at the partner level. Partnerships with corporate partners, in particular, should evaluate the alternate tax base so as to potentially eliminate the PE Tax and credit flow through issues that would otherwise apply to the corporate partners.

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Peter Michalowski

Peter Michalowski

State and Local Tax Leader, PwC US

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