California PTE elective tax calculator, 2026.
A partnership, LLC taxed as a partnership, or S corporation can pay 9.3% of its consenting owners’ California income at the entity level, deduct it federally, and pass each owner a credit for the same amount. Enter the owners’ shares and last year’s elective tax. The sheet returns the tax, the June 15 and March 15 payments, each owner’s credit after the 2026 reduction rule, and the federal tax the election saves against the 2026 SALT cap.
Rules are the Franchise Tax Board’s for taxable years 2026 to 2030 after SB 132, read October 2026 and listed at the bottom.
| Owner | Consents | Share of income | Federal rate | California rate | 2026 MAGI | Other SALT | Itemizes |
|---|
$0
on $0 qualified net income
Payments (FTB 3893 or Web Pay, designated PTE)
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| Owner | Share | Credit | CA tax on share | SALT cap | Schedule A change | Federal saving | Reading |
|---|
Credit: 9.3% of the share, less 12.5% of the owner’s share of any June 15 shortfall. CA tax on share: the share at the owner’s California marginal rate; where the credit exceeds it, the excess is nonrefundable and carries forward five years. SALT cap: $40,400 less 30% of MAGI over $505,000, floor $10,000 (joint and single; married filing separately uses half). Schedule A change: the state-tax deduction the owner gives up because the credit reduces what is paid personally. Federal saving: the owner’s share of the entity deduction, less the Schedule A change, at the federal marginal rate.
The tax and the credit
Qualified net income is the sum of each consenting owner’s share of income and guaranteed payments subject to California tax. An owner whose share nets to a loss is left out and gets no credit. The entity pays 9.3% of the total, deducts it federally in computing non-separately stated income under IRS Notice 2020-75, and adds it back for California. Each consenting owner claims 9.3% of their own share on FTB 3804-CR, after the other state tax credit, and carries any excess forward up to five years. The credit cannot offset the 1% behavioral health services tax.
The two payments
Payment 1 is due June 15 of the taxable year: $1,000 or 50% of the elective tax paid for the prior year, whichever is greater, with no exception for a one-time gain in the prior year. Payment 2, the balance, is due with the original return, March 15, 2027 for a calendar-year entity, without regard to extension. New for 2026 to 2030: a short or missed June 15 payment no longer bars the election. Instead each owner’s credit is reduced by 12.5% of that owner’s share of the unpaid amount (R&TC 17052.11). The federal deduction is not affected.
Who the election pays for
The 2026 federal SALT cap is $40,400, phased down by 30 cents per dollar of MAGI over $505,000 to a $10,000 floor at about $606,000. Above the floor every dollar of elective tax is a federal deduction at the owner’s marginal rate. Under the cap the election mostly moves a deduction from Schedule A to the entity and changes little. An owner whose California rate on the share is below 9.3% strands credit. The sheet reads each owner accordingly: consent, model both ways, or decline.
Rules
- Franchise Tax Board, Pass-through entity (PTE) elective tax (updated April 23, 2026): taxable years 2021 to 2030, qualified entities and taxpayers, the 9.3% rate, the June 15 and return-date payments, the 2026 to 2030 credit reduction, the nonrefundable credit and five-year carryover, forms 3804, 3804-CR and 3893. Read October 27, 2026.
- FTB, Help with PTE elective tax (updated August 4, 2026): SB 132, R&TC 19914(b) and 17052.11, the credit-reduction example this sheet reproduces, qualified net income from the Schedule K-1 lines, negative shares, nonresident sourcing, tentative minimum tax, the behavioral health services tax, credit ordering after the OSTC.
- IRS Notice 2020-75: entity-level state income taxes paid by a partnership or S corporation are deductible in computing non-separately stated income.
- Federal SALT cap for 2026 under P.L. 119-21: $40,400 ($20,200 married filing separately), reduced by 30% of modified adjusted gross income over $505,000 ($252,500), floor $10,000 ($5,000), through 2029; $10,000 from 2030. The Tax Adviser, Cap raised, strings attached, March 2026.
- Due dates: June 15, 2026 and March 15, 2027 are both Mondays. A date on a weekend or holiday moves to the next business day.
Simplifications
- One taxable year, 2026, for a calendar-year entity. Fiscal years and short first years (no June 15 inside the year, no Payment 1) are not modeled.
- California tax on the share is the share at a single marginal rate chosen for the owner. The credit is applied against that figure; other California tax of the owner may absorb an excess the sheet shows as carrying forward.
- Federal saving uses one marginal rate per owner. No alternative minimum tax, no net investment income tax, no estimated-payment timing. The Section 199A effect is a flat 20% of the deduction when selected.
- The SALT figures are the owner’s Schedule A amounts, not the entity’s. Married filing separately, nonresident owners’ home-state credits, trusts and estates are not modeled.
- This is an estimate for planning the election and the consents, not a return position or tax advice. Model the actual returns before any payment.
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