This is the first year our state of Arkansas has the provision for a partnership to use the PTET form. I am new to this, and was wondering if it would be beneficial or not for our LLC. It made me wonder if this PTET is for each partner's share of income as reported on their K-1's, or does it apply to guaranteed payments as well? It doesn't seem like it would be worth the trouble to change everything if it is only for the profit of each partner as reported on the K-1's. In our case, we are a small family business, and most of the income for each partner is in the form of guaranteed payments, not distributions. So most of the state taxes owed are from the guaranteed payments, not the K-1's. Everyone takes the standard deduction, so the fact that there is no more SALT cap of $10,000, is of no benefit to us since no one itemizes deductions. I am having trouble seeing the benefit for us.
I hope this makes sense, I am barely familiar with this new PTET option. Thank you.
