Diane, Thank you for your reply. However, my understanding is that the NJ BAIT payment is deductible as a business expense of the PTE (in my case, an S-Corp). However, it is not reported on the 1120-S schedule K-1. Hence, I need to record it as an expense on my 1040 to offset the income reported on the K-1. The purpose of this NJ state approved program is to avoid the $10,000 limit on state and local tax payments by an individual. Hence, by deducting it as a business expense, I avoid that limitation. So, it needs to be reported as an expense on my Federal return to offset the K-1 income. I thought I would record it as described in my original question, but can't seem to input values on that schedule. Any idea why that would be?
BTW, I have no issue reporting it on my NJ return. That's correct. Its the deduction described above which is the only issue.
