Where to enter Pass-Through Entity Elective Tax Payment Credit from Virginia VK-1

[deanb2]

I received a Virginia VK-1. "Part III - Refundable Credits" includes "10. Pass-Through Entity Elective Tax Payment Credit" (PTET credit). In filling out the Virginia state return in TurboTax Desktop, there is a field to enter "Amount withheld by PTE for the owner" (the VK-1 field, matches TurboTax's field, "Virginia income tax withheld for you") but no field to enter the PTET credit. Where do I enter the PTET credit?

[DMarkM1 · Accepted solution]

You are correct that is a manual entry (see below).  In desktop versions using the "Forms Mode" open the VA form CR pg 3-5. Find Part 6 and item 6a.  

Pass-Through Entity Elective Tax Payment Credit

A tax credit is available for any amount of income tax paid by a qualifying Pass-Through Entity ("PTE") having Virginia taxable income if the PTE makes the election and pays the elective income tax imposed at the entity level.

If this credit applies to you, you must manually enter the credit amount on Schedule CR based on information from the Schedule(s) VK-1 you received from the pass-through entity.

[jdojr21]

I have a related question. There appears to be a glitch in program's ability to address PTE credit payments against the obligation to make estimated quarterly payments. The result is an underpayment penalty despite the fact that the PTE payments were made lump sum prior to the first estimated quarterly payment date. In fact, contrary to there being no quarterly estimated payment, the reality is there should be an imputed overpayment attributable to each estimated quarterly payment (by virtue of the fact that PTE payments are made at the maximum rate without regard to any adjustments to AGI and without regard to credits for tax payments made to other states. While the program will accept an override to Form 760C of the 2023 tax liability to be a negative amount (to reflect overpayments) on line 1, it will not allow an override (of any information) to the the tax liability in line 7 to reflect the overpayment amounts at each quarterly payment date. Any suggestions on how to force this information into Form 760C. I think this necessary because a taxpayer has the obligation to prove the reason why estimated payments were not made to avoid the underpayment penalty. This appears to be a Virginia return problem, as I also file taxes in NY and no underpayment penalty is being computed in that return.

[June YW]

Same VK-1 but a different question: Do you enter actual PTET tax per K-1 or the est. PTET you paid on Schedule CR?  What to do about the difference? In my case, I paid more est PTET than actual.  Thanks

[PatriciaV]

Enter the actual amount that was paid, even if it was an estimate and was not the same as the amount reported on Schedule K-1. The difference should be refunded to you.

@June YW