Minnesota Pass-through entity credit for Wisconsin Resident

[lrbainbridge]

Hi,

My husband works in Minnesota and we live in Wisconsin.  His partnership opted to do the pass-through entity tax credit this year.  I don't know where it should be entered in our Wisconsin return.  We've always paid estimated taxes quarterly prior to this year and have always had a Schedule OS and received a credit for our MN taxes we've paid, but that isn't an option with the pass-through apparently.  Also, how does this effect our federal taxes, as I don't know where that entry is made either.  I appreciate any assistance!

Thank you!

[GeorgeM777]

You claim the credit on your MN non-resident tax return.  When you prepare your MN return, you will get to the page Tell Us About Any Income Adjustments.  Select Had pass-through state income tax or credit from K-1s.  In the appropriate box, enter the amount of the credit. 

Complete your MN non-resident return first before preparing your WI return.  When you prepare your WI return, TurboTax will inquire about the taxes you paid to MN.  In order to know the taxes you paid to MN, complete that return first then prepare your WI return.

For your information, here are the requirements for a non-resident partner to claim the MN pass-through entity tax credit which was obtained for the MN Department of Revenue website:

"To qualify, the nonresident partner or shareholder must not have Minnesota source income other than from:

• Entities that file Schedule PTE
• Entities for which the partner or shareholder elects to be included in the entity’s composite income tax return."

@Irbainbridge

[lrbainbridge]

Hi,

I did my MN Non-resident return first. Turbotax normally populates things from my MN to WI return and it hasn't done that this time.  Is that normal in this situation?  We paid a large amount of taxes to MN with this new PTE option and currently looks like we owe a pretty good chunk to WI too, unless this is something that I have to go in to do manually.  It doesn't look like it wants to let us have credit for all we've paid MN.  

Thank you so much for your help!

[ZoltanB45]

You also asked how the Pass Thru Entity tax affects your federal tax return. It affected it without having to do anything on your 1040. The taxes paid on the entity level, reduced the ordinary income on your k-1. The taxable income on your federal return was reduced by the amount paid in.