The Department has modified the Pass-Through Entity Tax (PTET) election deadline for tax year 2023 or later. Detailed guidance is available on the Department’s website.
PTET election deadline for tax year 2023 or later. The Department has modified the deadline to make a PTET election for tax year 2023 or later. As a result, for any tax year beginning on or after January 1, 2023, the PTET election deadline is the date which is six months after the original due date of a pass-through entity’s IA 1065 or IA 1120S income tax return. Additional information can be found at the Department’s Pass-Through Entity Tax guidance page under Making a PTET Election - “What is the deadline for making a PTET election?”
Pass-through entities that already made a PTET election for tax year 2023 or later. The Department is reviewing all PTET elections for tax year 2023 or later in light of the modified PTET election deadline. No new action is required by any pass-through entity that has already made a PTET election.
Pass-through entities that did not make PTET election for tax year 2023 (or short tax year 2024) – temporary relief. The Department is providing a limited period of time for a pass-through entity to make a PTET election after the deadline for tax year 2023 (or short tax year 2024) under certain circumstances. Additional information can be found at the Department’s Pass-Through Entity Tax guidance page under Making a PTET Election - “If you did not make a PTET election for tax year 2023 (or short tax year 2024) by the deadline, can you make it after the deadline?”
Penalties and interest. This modification of the PTET election deadline described above does not change the application of penalties and interest. Under Iowa law for tax year 2023 or later, an electing pass-through entity’s IA 1065 or IA 1120S tax return and PTET liability must be filed and paid by the last day of the fourth month following the close of the entity’s tax year (i.e. the “original due date”). Failure to file by the original due date subjects the electing pass-through entity to a 5 percent late file penalty. Failure to pay by the original due date subjects the electing pass-through entity to a 5 percent late pay penalty, plus interest. If the electing pass-through entity pays at least 90 percent of its tax liability by the original due date, the electing pass-through entity will be eligible for an automatic six-month extension to file its return without incurring a late filing penalty, and no late payment penalties will be imposed. Interest will accrue on any amount of PTET not paid by the original due date of the IA 1065 or IA 1120S tax return.
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