Montana Department of Revenue Tax Guidance & Form Instructions
Montana Publication 4 — Pass-Through Entity Tax Guide (PTET deep-dive)
preamble
Introduction .......................................................................................... 1 Federal Tax Law Implications ....................................................... 1 Acronyms and Definitions .................................................................... 1 Pass-Through Entity Tax Election ........................................................ 1 Calculating the Pass-Through Entity Tax ............................................. 2 Montana Source Income .............................................................. 2 Resident Election ......................................................................... 2 PTEs Not Doing Business in Montana ......................................... 2 Nonrefundable Income Tax Credits .............................................. 2 Paying the PTET ................................................................................. 2 Estimated Taxes ........................................................................... 2 Flow-Through Payments .............................................................. 2 Refunds of Overpayments ................................................................... 3 Penalties and Interest .......................................................................... 3 Reporting Pass-Through Entity Tax on the Form PTE ........................ 3 Form PTE Preparation Chart........................................................ 3 Montana Adjustments Worksheet ................................................. 3 Schedule K-1 ................................................................................ 3 Flow-Through Payments Schedule .............................................. 4 PTET Reporting for Owners ................................................................ 5 Montana Adjustments to Income .................................................. 5 Refundable Tax Credit .................................................................. 5 Owner Estimated Taxes ............................................................... 5 Tax Credit for Income Taxes Paid to Another State ...................... 6 Questions? .......................................................................................... 7 Appendix.............................................................................................. 8 PTE Preparation Charts ............................................................... 8 Example 1 - Partnership Making a Resident Election and Receiving Flow-Through Payment.......................................... 14 Example 2 - S Corporation Not Making a PTET Election and Receiving a Flow-Through PTET Credit ................................. 19 Example 3 - Resident Election With Flow-Through Payment Allocation, Overpayment......................................................... 24 Pass-Through Entity Tax Guide V2 1/2024
Senate Bill 554, passed during the 68th Legislature, created a new elective tax for partnerships and S corporations. The pass-through entity tax (PTET) is an elective tax paid by the pass-through entity on an owner's distributive share of Montana source income. The pass-through entity may claim this tax as an above-the-line deduction for federal income tax purposes. The tax is assessed at the entity level and is passed to its owners to be used as a refundable credit against any Montana income tax owed. The state and local tax deduction limitation on the individual owners' federal returns does not apply to this tax, as provided in IRS Notice 2020-75. Federal Tax Law Implications This guide does not address the federal tax law implications related to making a PTET election in Montana or any other state. The department cannot provide guidance or advice to a taxpayer about any method to determine the amount of the PTET paid or accrued to Montana that can be deducted for federal tax purposes. However, the information in this guide will provide taxpayers with information about how to determine the amount of the Montana PTET and the Montana tax implications of an election. Taxpayers may use this information to file their own federal income tax return. Acronyms and Definitions The following acronyms and definitions are used throughout this guide. Affected owner. Affected owners include individuals, estates, trusts, partnerships, S corporations, and disregarded entities owned by individuals, estates, or trusts. Owners that are not affected by the PTET are C corporations, tax-exempt entities, or disregarded entities owned by a partnership, a corporation, or an undisclosed person. An affected owner is an owner that is receiving a PTET credit based on its MTSI derived from the activities of a directly or indirectly owned PTE making the election. Electing pass-through entity (PTE). Partnership or an S corporation electing to be subject to the PTET. Flow-through payment. A payment made by a third or related party on behalf of a pass-through entity. Mineral royalty withholding (MRW). Mineral royalty withholding is the withholding required under 15-30-2538, MCA and paid by remitters of the royalties. Montana source income (MTSI). The PTE's income as determined pursuant to the allocation and apportionment provisions under the Multistate Tax Compact (See 15-6-201, MCA), or the distributive share of everywhere income allocable to a resident owner when the resident election is made. Pass-through entity tax (PTET). An elective tax assessed by a PTE on the distributive share of Montana source income for all affected owners and equal to Montana's highest marginal income tax rate. Pass-through withholding (PT-WTH). Back-up withholding tax assessed on certain pass-through entity owners under 15-30-3313, MCA. PTET credit. The amount of the PTET an owner may use as a refundable tax credit against its Montana tax liability. Resident owners. Resident individuals, estates, trusts, and disregarded entities owned by a disclosed resident individual, estate, or trust. Pass-Through Entity Tax Election A PTE must elect to pay the PTET. The election is made by an authorized representative of the PTE's choosing. That representative must be disclosed on Form PTE. Typically, this is the same representative that will represent the PTE during any audit proceedings in front of the department. (See 15-30-3402, MCA.) The election must be made by the extended due date of the Form PTE. Once a valid election is made, it is irrevocable. An election made after the extended due date for filing Form PTE is not valid. If the department receives a Form PTE after the extended due date with a PTET election, the election will be denied, the PTET will be reversed, and any amount paid in connection with the return will not be treated as a payment of the PTET and, instead, will be treated as payment of PT-WTH. As a result, when a PTET election is made, the distributive share of MTSI attributable to entities not affected by PTET may be subject to passthrough withholding tax (PT-WTH) as required by statute, with the alternative being to include these owners in a composite election.
Calculating the Pass-Through Entity Tax For Tax Year 2023, an electing PTE calculates the PTET at 6.75 percent of the distributive share of MTSI attributable to all affected owners. In Tax Year 2024, the rate will decrease to 5.9 percent.
Montana Source Income
By default, the MTSI used for the calculation of the PTET is the MTSI determined by the PTE using apportionment and allocation rules under the Multistate Tax Compact adopted by Montana under 15-1-601, MCA. However, MTSI also includes all other pass-through items of income received by a Montana resident when the resident election is made. (See the Resident Election section.) The PTET may only be calculated on the distributive share of MTSI of affected owners. Disregarded entities must disclose their beneficial owner to the PTE and the tax identification number of the owner must be included on the Montana Schedule K-1 to be affected by the PTET election. The distributive shares of MTSI attributable to owners not affected by the PTET are not included in the calculation of the PTET. Resident Election When MTSI is less than 100% of everywhere net income, and some or all of the owners of the PTE are resident owners, the PTE may elect to use 100% of the distributive share of income allocable to resident owners, regardless of apportionment and allocation rules. When this election is made it is effective for all resident owners. Partnerships may have to make corresponding special allocations of federal deductions to match the federal benefit with the Resident PTET election. PTEs Not Doing Business in Montana Partnerships and S corporations that do not conduct any business in Montana but that have Montana resident owners may file Form PTE and elect to pay the PTET. Because MTSI based on apportionment and allocation rules is zero, the PTE must make the Resident Election to make the PTET election effective. Important: S corporations must exercise caution before using this election to avoid creating a second class of stock. Nonrefundable Income Tax Credits Nonrefundable income tax credits including the Contractor's Gross Receipts Credit cannot be used to offset the PTET. These credits must be passed to owners to claim on the Montana Individual Income Tax Form (Form 2) or Montana Income Tax Return for Estates and Trusts (Form FID-3). Paying the PTET A PTE can make payments for the PTET and other taxes in two different ways: estimated payments and flow-through payments. Estimated Taxes PTEs that elect to pay the PTET or composite tax are required to make quarterly estimated tax payments for the following year. For a calendar year PTE, payments are due April 15th, June 15th, September 15th, and January 15th. If any of these days fall on a weekend or holiday, the payment is due on the next business day. Any pre-payment made by the PTE will be treated as a PTET estimated payment by default. Any excess is applied first against composite tax, then against PT-WTH. For Tax Year 2023, the PTE may make estimated payments in proportion to when it began making estimated payments. For example, if a PTE began making estimated payments on September 15, 2023, the payment would be made in two installments. Beginning in Tax Year 2024, the PTE must make quarterly estimated payments if it elects to pay the PTET for the preceding tax year. Estimated payments must be made by the PTE itself. The department will not transfer estimated tax payments from an owner's account to a PTE account. A PTE cannot make estimated payments on behalf of another PTE, even if that PTE is owned by the same owner(s). Flow-Through Payments PTEs receiving flow-through payments must use them in whole or in part to pay the PTET. Each type of indirect payment follows different rules of attribution. Form PTE, Flow-Through Payments Schedule must be filed to apply flow-through payments against the different tax types: PTET, composite tax, and PT-WTH. Allocation of payments is complex. We recommend that PTE returns are filed electronically to avoid miscalculations in their aggregation and allocation.
Refunds of Overpayments Any overpayment of the PTET, including excess estimated payments or flow-through payments attributed to the PTET is refunded at the entity level. The PTE may only allocate the PTET to its affected owners. If the PTE makes the election, it not be able to pass excess PTET payments to its affected owners because the PTET is an entity tax, not a withholding.
Penalties and Interest
The PTET is subject to the same penalties and interest as individual income tax. Interest on Underpayment of Estimated Tax The PTE is required to make estimated tax payments throughout the year if it expects to owe a PTET liability of at least $500. If the PTE was required to make estimated PTET payments and it did not pay the required amounts, it must pay interest on any underpayment. Interest on the underpayment of estimated tax is not assessed if no tax was due in the preceding year. PTET estimated payments made for Tax Year 2023 will not be subject to the interest on underpayment of estimated tax. Beginning in Tax Year 2024, the PTE must make estimated payments if it elects to pay the PTET for the preceding tax year. Underpayment of estimated tax is subject to interest. Late Filing Penalty A return filed after the due date, including the automatic six-month extension may not make a PTET election and is subject to the information return late filing penalty. The penalty is $10 multiplied by the number of owners at the close of the tax year for each month or fraction of a month that the entity does not file the PTE information return. This penalty is calculated for up to five months and may not exceed $2,500. See 15-30-3302, MCA. Interest Rate The interest rate for taxes not paid when due in 2023 is 5 percent. Effective January 1, 2024, the annual interest rate assessed on outstanding balances is 7 percent. This rate also applies to underpayment of estimated taxes. Interest is calculated daily. Reporting Pass-Through Entity Tax on the Form PTE Form PTE Preparation Chart The preparation charts included in the appendix are designed to help preparers complete Form PTE. Preparers may choose to follow preparation software that already includes these steps. You may use the following instructions as a guide to prepare a Form PTE that includes the PTET.
Montana Adjustments Worksheet
Prepare the Montana Adjustments Worksheet to report additions to and subtractions from total federal income.
Montana Additions
State income tax, including the PTET paid to Montana and other states, is not a deductible expense for Montana. When a PTE takes an above-the-line deduction for the PTET paid to any state that deduction must be added back to federal income. Generally, this amount is reported on Montana Adjustments Worksheet, line 1, column A, with the total amount of PTET reported on Page 1, line 15. The distributive share of the addition is reported on each owner's Schedule K-1. If the PTE is receiving income from a lower-tier PTE, the addback is reported on Montana Adjustments Worksheet, line 1, column A, with the total amount of additions reported on Page 1, Line 15. The distributive share of the addition is reported on each owner's Schedule K-1. In a tiered structure, because the deduction for state or local taxes can increase or decrease at each tier separately, each tier must adjust the amount that must be added back.
Montana Subtractions
If a PTE receives a refund of the PTET paid, it must recognize that as income for federal tax purposes because of the tax benefit rule. That refund is not income for Montana tax purposes and is deducted from federal taxable income regardless of which state issued the refund. Schedule K-1 The PTET is calculated on each owner's Schedule K-1. Multiply the owner's distributive share of MTSI reported on Schedule K-1,
Column B, Part 4, Line 14 by 6.75 percent. If making a Resident Election, multiply the resident owner's total share of distributive share of income reported on Schedule K-1, Column A, Part 4, Line 14 by 6.75 percent. Report the owner's PTET on Part 5, Line 1. The owner reports this amount as a refundable credit on their income tax return. The total amount of PTET assessed is reported on Form PTE, page 2, Line 25. Flow-Through Payments Schedule PTEs that receive any flow-through payments must use the Flow-Through Payments Schedule to report these payments and apply them to any liability the PTE may have. Flow-through payments include MRW, PT-WTH, and the PTET credit and can be used as a credit against a tax owed by the PTE. Flow-Through Payments Schedule, Part I Each of the types of flow-through payments received by the PTE are compiled in Part I. Column A - MRW. MRW is withholding on a taxpayer's mineral royalties paid to the department by the remitter of the mineral royalty. It is reported to the recipient of the mineral royalty on federal Form 1099-MISC. MRW can also be received from a lower-tier PTE that did not elect to pay the PTET. Column B - PT-WTH. PT-WTH is assessed by a lower-tier partnership on the distributive share of Montana source income allocated to the PTE. The PT-WTH is paid out of the PTE's capital account in the lower-tier partnership. As a result, this payment may constitute a payment of PTET for the upper tier electing to pay the entity tax. PT-WTH is reported to a PTE on its Schedule K-1 from the lower-tier entity. Column C - PTET Credit. PTET credit is allocated to the PTE if the PTE owns interest in a partnership that elected to pay PTET. PTET credit is reported to a PTE on its Schedule K-1 from the lower-tier entity. Flow-Through Payments Schedule, Part II In Part II, taxpayers will credit each flow-through payment type to each PTE tax type the taxpayer may owe. Part II allocates the total flow-through payment types between three groups of owners based on each group's sum of profit and loss ratios. Group one includes all affected owners if the PTE elects to pay the entity tax. Group two includes participants in a composite election. Note that because some owners are not affected by PTET, a return can have a group of affected owners and a group of C corporations electing to pay composite. Group three includes the owners that are not participating in a composite tax election. If the PTE does not elect to pay PTET, group three also includes affected owners which may be allocated PTET credit received by the PTE based on their share of profit and loss. PT-WTH may be required on the distributive share of MTSI allocated to the owners of this group. Note: If the PTE does not elect PTET and there are owners included in a composite election, Part 5, Line 1 of the K-1 for those owners must equal zero. No credit can be distributed to these owners. MRW and PT-WTH. Each owner's distributive share of MRW and PT-WTH from Part I constitutes a payment of PTET, composite tax, or PT-WTH assessed at the PTE level. MRW must be pushed out to group three owners not subject to any taxes on their Schedule K-1. The PTE may also choose to push out excess MRW and PT-WTH from Part I in addition to assessing PT-WTH on group three owners. PTET Credit. The aggregate of PTET credit coming from lower-tier PTEs is allocated to each group differently whether the PTE elects to pay PTET or not. If the PTE elects to pay PTET, the PTET credit is applied against the PTET assessed on the distributive share of Montana source income allocated to group one owners. If the PTE does not elect to pay the PTET, the PTET credit is allocated to group two and group three owners based on profit and loss. The PTET credit cannot be pushed out to group three owners that are not affected by PTET. Any excess credit must be claimed by the PTE and potentially refunded. Note that when the PTE does not elect and receive the PTET credit, if pass-through withholding is owed, it must be reduced by the amount of the PTET credit allocated to the owner. Part II, line 12 for each column is the amount of flow-through payments that the PTE can use to pay each tax. The resulting totals are reported on Form PTE, Page 2 and applied to each PTE tax type.
PTET Reporting for Owners Direct and indirect owners receiving the PTET credit may have certain reporting requirements. An owner's PTET is used as a refundable credit against the owner's tax liability and must be reported on the owner's tax return. Owners must add back the above-the-line deduction for the PTET taken against federal taxable income. If a PTET is paid in another state, resident individual, trust, and estate owners may take the tax credit for income taxes paid to another state for the PTET liability in the other state. However, if the PTET is paid on behalf of a nonresident owner whose only MTSI for the tax year is from the PTE, the owner is not required to file an income tax return. The payment of the PTET by the PTE relieves the owner of the income tax return filing requirement.
Montana Adjustments to Income
Any state PTET taken as a deduction from total federal pass-through income or recognized as income on the owner's federal return must be added back or subtracted respectively on the owner's Montana return. When the owner receives a Montana Schedule K-1, that addition or subtraction is shown in Part III, and includes the deduction related to taxes paid to other states. Because of the possible difference between what is being deducted by the PTE on the federal return and the amount of PTET assessed on the Montana return of the same tax year, the Montana Adjustment and the PTET credit are likely to be different amounts. When the owner does not receive a Montana Schedule K-1, the owner must obtain the relevant information from the PTE. Note that PTEs can file a Montana return and issue Montana Schedules K-1 to provide owners with this information even if the PTE does not conduct business in Montana. Refundable Tax Credit The PTET is a refundable tax credit to be used against the owner's Montana tax liability. Individuals report the PTET credit on Form 2, Other Payments Schedule. The owner must first calculate their Montana liability without regards to the Montana PTET credit, and then claim the PTET credit as a refundable credit. Estates and trusts report the PTET credit on Form FID-3, line 38a. Estates and trusts distribute the PTET credit to beneficiaries in the same proportion used to report the beneficiary's income from the estate for Montana income tax purposes. Note that other states' PTET are never a refundable credit. Owner Estimated Taxes PTE owners are often required to pay estimated taxes. Owners may reduce their estimated taxes by the amount of PTET credit they expect to receive from the PTE. That is because when determining the existence of an underpayment of estimated taxes, the liability calculated on the owner's return is reduced by the amount of PTET credit shown on the MT Schedule K-1 received by the owner. Estimated taxes must be paid by the PTE. Owners cannot pay the PTET. Estimated taxes paid by the owner will not be credited against the estimated taxes that the PTE must pay. To avoid paying interest on the underpayment of estimated tax, the owner must determine how much PTET credit they are expected to receive. The owner may use the amount of PTET credit to determine the owner's estimated taxes and in the calculation of any interest on the underpayment of estimated tax owed at the owner level. Example 1: Jane owns 50% interest in a PTE. Without regards to the PTET, she owes a total of $24,000 in estimated taxes. The PTE is electing to pay the PTET and plans to pay $20,000 of estimated taxes representing 100% of the PTET assessed, or that would have been assessed, in the previous year. The PTE is expecting an increase in net income. Jane decides to reduce her estimated tax payments by $10,000. She receives a PTET credit of $16,000. Jane qualifies for the safe harbor of 100% of the previous tax year taxes. Example 2: Same facts as Example 1, except that the PTE communicates during the year that sales are lower by 10 percent compared to last year. Jane decides to reduce her estimated taxes by $8,000 to $16,000. When the PTE files its return, its PTET is assessed at $18,000 and the PTE is refunded $2,000. Jane's PTET credit is $9,000. Because Jane paid $16,000 of estimated taxes and received a PTET credit of $9,000 for a total
of $25,000, she qualifies for the $24,000 safe harbor of 100% of the previous year taxes. Example 3: Same facts as Example 1, except that the PTE is expecting a loss and does not pay PTET estimated taxes. Jane does not want to overpay her estimated taxes. She wants to qualify for the 90% safe harbor of the current year taxes to avoid underpayment of estimated taxes. Because the PTE losses would be suspended, she calculates her estimated taxes without regards to PTE losses. Jane decides to reduce her estimated taxes by $10,000. Her other items of income for the year are similar to what they were in the previous year. As a result, her current year taxes are $15,000. Because Jane paid $14,000, she meets the safe harbor of 90% of the current year taxes. Tax Credit for Income Taxes Paid to Another State Resident owners may claim a credit for income taxes paid to another state, including a payment of another state's PTET. The credit is calculated on the owner's income tax return. Individuals use the Credit for Income Taxes Paid to Another State or Country Schedule on the Form 2. Estates and trusts use Worksheet I, found in the Form FID-3 instructions. This guide addresses the calculation of the credit for purposes of the PTET. Complete instructions for the calculation of the credit may be found in the Form 2 or Form FID-3 instructions. Before calculating the credit, report your pro-rata share of the state income tax deduction as an addition to federal income. Individuals report this on Form 2, Additions Schedule, line 14. Estates and trusts report the amount on Form FID-3, Schedule A, line 5. An owner completes the Credit for Taxes Paid to Another State Schedule as follows. Line 1. Enter the income subject to tax in Montana and in the other state, including when the final tax was paid at the entity level. Line 2. Enter the income taxed in the other state. If the tax was paid at the entity level, the taxable income is the income subject to PTET and/or composite tax. Line 3. Enter the income taxable to Montana. Line 4. Enter the total income tax liability paid to the other state, without regards to the other state's PTET credit, if any. If the tax was paid at the entity level and the owner did not have to file a return in the other state, enter the amount of foreign PTET or composite tax represented on the other state Schedule K-1. Line 5. Enter the Montana tax liability calculated without regards to the Montana PTET credit. Then follow instructions of lines 6 through 10. Example: Charles is a resident of Montana. He owns an interest in Partnership X that does business in Montana, California, Colorado, and Connecticut. Partnership X paid the PTET in all the states in which it is doing business. Charles did not optout of the election in California. In all the states the PTET was assessed based on apportioned income. Charles's situation in 2023 is represented in this table with the assumption that all states use the same rules of apportionment: 2023 Montana Credit for Income Taxes Paid to Another State State Apportioned PTET Rate PTET Deduction taken on federal return Montana $30,000 6.75% $2,025 $2,000 California $20,000 9.30% $1,860 $2,000 Colorado $90,000 4.40% $3,960 $4,000 Connecticut $20,000 6.99% $1,398 $1,400 Total $160,000 $9,243 $9,400
The difference between the total of the PTET assessed and federal deduction results from the payments X can deduct as a cash-based partnership. Charles received a state K-1 in each state that shows the amount of PTET assessed. Charles received a PTET credit in Montana, California, and Colorado equal to the PTET assessed by X. The Montana and Colorado credits are refundable in each respective state. California's credit is limited to the $1,000 of taxes assessed on Charles's California income tax return. Connecticut has a nonresident filing exemption. Charles chooses not to file a Connecticut return because they provide an exemption, not a credit on the owner's return, and filing a return would not result in any refund. When filing his Montana return Charles must do the following: 1. Record a Montana addition of $9,400 for the deduction taken for federal tax purposes with regards to the PTET paid at the state level. (This information should be provided by X). 2. Claim $2,025 of the PTET refundable credit on Form 2 for 2023. 3. Calculate the Montana tax on $160,000 of pass-through income. This amounts to $8,320, which results in an effective tax rate of 5.2% Charles must also eliminate double taxation by claiming a credit for taxes paid to California, Colorado, and Connecticut. With regards to California: Income subject to double taxation is $20,000. The corresponding Montana tax is $1,040. Although the California PTET credit is $1,860, Charles only applied $1,000 against his 2023 California taxes because his effective tax rate in California is 5%. The remaining $860 is carried forward to future years. The credit equals $1,000, which is less than the Montana tax. With regards to Colorado: Income subject to double taxation is $90,000. The corresponding Montana tax is $4,680. Although the Colorado PTET credit is $3,960, this is not the amount that Charles must compare to the Montana taxes because the Colorado PTET is a refundable credit on Colorado income tax. Charles paid an effective rate of tax of 4%. The Colorado tax on the $90,000 of pass-through income is therefore $3,600. The credit equals $3,600, which is less than the Montana tax. With regards to Connecticut: Income subject to double taxation is $20,000. The corresponding Montana tax is $1,040. Charles paid $1,398 of taxes on pass-through income in Connecticut. This amount was not reduced. The credit equals $1,040, which is less than the Connecticut tax. Total credits for taxes paid to other states equals $5,640 [$1,000 + $3,600 + $1,040]. Questions? Call us at (406) 444-6900, or Montana Relay at 711 for the hearing impaired. Email questions to DORPassthrough@mt.gov.
PTE Preparation Charts Note that Step 1 may have to be done twice if the entity is electing PTET IIff tthhee PPTTEE eelleeccttss ttoo ppaayy tthhee PPTTEETT, it must figure how much PTET is deductible on its federal return. Some Schedules of Form PTE can be used to make that determination as follows: With respect to the tax year the return is prepared, the deductible amount of the PTET includes: All pre-payments made by the PTE during the tax year, including tentative payments of withholding. All Mineral Royalty Withholding (MRW) payments made on behalf of the PTE and applied against the prior year PTET in the Flow-Through Payments Schedule Part II, Column A, Line 4. All Pass-Through Withholding (PT-WTH) payments made on behalf of the PTE and applied against the prior year PTET in the Flow-Through Payments Schedule Part II, Column A, Line 7. Note that IRS Notice 2020-75 does provide limited guidance only for cash basis taxpayers. Note that amounts can be found on the prior year return to the extend it was filed timely. This part starting in tax year 2024.
Prepare Federal Form 1065 or 1120S, as applicable Transfer federal Schedule K and Schedules K-1 to Form PTE and Schedules K-1 Prepare Schedule I if the PTE is a multistate entity with operations in (see instructions) Complete all other Schedules and Worksheets as needed
PTET Election Resident PTET The PTET taxable income for resident owners equals Column A, Part 4, line 14. For all other owners subject to the PTET, taxable income equals Schedule K-1, Column B, Part 4, Line 14. The PTET taxable income equals the total of owners' subject to the PTET Schedule K-1, Column B, Part 4, Line 14. Yes No DDeeffiinniittiioonnss:: AAffffeecctteedd oowwnneerrss means: individuals, estates, trusts, partnerships, S corporations and disregarded entities owned by individuals, estates, and trusts. Reessiiddeenntt oowwnneerrss means resident individuals, estates, trusts, and disregarded entities owned by resident individuals, estates, and trusts. Go to Step 3 Go to Step 3 Mark the PTET election on Form PTE, page 1 and all affected owners' Schedules K-1 Mark Resident PTET election boxes on Form PTE Page 1 and Resident owners Schedules K-1. Calculate the PTET on each Schedule K-1, and report the sum of all PTET form Schedules K-1 on Page 2. Report the sum of the taxable income from all Schedules K-1 where the PTET election is marked, on Page 2.
Composite tax Go to Step 4NO Mark the Composite tax boxes on Page 1, and on the Schedule K-1 of each owner participating in a composite election. Owners included in a PTET election cannot participate in a composite tax election. Complete Schedule IV and Schedule K1, Part 5, composite tax for each participant. Report the total from Schedule IV, Column H on Page 2 of Form PTE. Go to Step 4
Pass-Through Withholding (PT- WTH) applies to nonresident owners, PTEs, foreign corporations and tax exempt entities. Is the PTE issuing Schedules K-1 to any of these owner types? For each owner, does the owner have a waiver of withholding (Form PT-AGR) on file? Assess withholding on the owner's K-1, Part 5, line 3a. Combine PT-WTH from all K-1(s), Part 5, line 3a and report the total on Form PTE, page 2. Go to Step 5 Go to Step 5
Report all prepayments on Page 2, line 1 and 2. Line 2 is for carryover from the previous year. Report all flow-through payments on the Flow-Through Payment Schedule Part I. Allocate the flow-through payments against taxes assessed on form PTE in the Flow-Through Payments Schedule Part II. Report the total of payments allocated against the taxes assessed on Form PTE, Page 2. Determine if there is an amount due or a refund
Page 14 of 32*23TT0101* *23TT0101* 3202DDMM YYYYDDMM Y Y YYDDMM Y Y YYDDMM Office Use Only Date Received 2023 Montana Pass-Through Entity Tax Return Include a complete copy of all related federal forms and schedules. Partnership S corporation For calendar year 2023 or tax year beginning and ending Name FEIN Federal Business Code/NAICS Mailing Address MT Secretary of State ID # Date of Registration in Montana City State ZIP Code + 4 State formed in on Form PTE P Enter Number of: Schedules K-1 Included Nonresident Owners Schedules DE Included Resident Owners Other Types of Owners Schedules K-1 Received Federal Schedule K Owners' Distributive Share of Income Items (federal Schedule K) 1 Ordinary business income (loss) 2 Net rental real estate income (loss) (include federal Form 8825) 3a Other gross rental income (loss) 3b Expenses from other rental activities (include detailed statement) 3 Subtract line 3b from line 3a. This is your other net rental income or loss. 4a Guaranteed payments: Services 4b Guaranteed payments: Capital 4 Add lines 4a and 4b This is your total guaranteed payments. 5 Interest income 6 Ordinary dividends 7 Royalties 8 Net short-term capital gain (loss) (include federal Schedule D) 9 Net long-term capital gain (loss) (include federal Schedule D) 10 Net section 1231 gain (loss) (include federal Form 4797) 11 Other income (loss) (include detailed statement) 12 Add lines 1 through 11 and enter result. This is your total federal income or loss. Owners' Distributive Share of Deduction Items (include federal Schedule K) 13a Section 179 deduction (include federal Form 4562) 13b Contributions 13c Investment interest expense 13d Section 59(e)(2) expenditures (include detailed statement) 13e Other deductions (include detailed statement) 13 Add lines 13a through 13e and enter result. This is your total federal deductions. 14 Subtract line 13 from line 12. This is your federal income from all sources.
Montana Source Income
15 Montana additions to the PTE's apportionable activities 16a Montana subtractions from the PTE's apportionable activities 16b Total everywhere income (loss) from federal Schedules K-1 16c Total everywhere income (loss) from disregarded entities 16d Other nonapportionable income (loss) from the PTE's own activities 16 Add lines 16a through 16d. This is your deductions including nonapportionable income. 17 Add lines 14 and 15, then subtract line 16. Schedule I not required: 18 Income (loss) apportioned to Montana. Multiply line 17 x % 19a Total Montana source income received from pass-through entities (Montana source income from MT Schedules K-1 issued to this entity) 19b Total Montana source income from Schedules VII 19c Nonapportionable income allocated to Montana. (See instructions) 19 Add lines 19a through 19c. This is the total nonapportionable income (loss) sourced to Montana. 20 Add lines 18 and 19; enter result. This is your total Montana source income. 3a 3b 4a 4b 13a 13b 13c 13d 13e 16a 16b 16c 16d 19a 19b 19c 2023v1 08/2023 100% Montana activity 0% Montana activity Mark all that apply: Initial return Final return Amended return Refund return Resident PTET Clear Form Example 1 60.0000 60000 Example 1 - Partnership Making a Resident Election and Receiving Flow-Through Payment Partnership X has two owners with 50% interest each; Owner 1 is a nonresident and Owner 2 is a resident. The partnership receives MRW as flow-through payment on a federal Form 1099-MISC. Example 1 illustrates the effect of the Resident election on the resident owner. It also shows how the MRW is used to pay for the PTET and, as a result, is not pushed out to owners.
*23TT0201* *23TT0201* Form PTE, Page 2 - 2023 FEIN Direct Deposit Your Refund Complete 1, 2, 3, and 4. (See instructions) 1. RTN# 2. ACCT# 3. If using direct deposit, you are required to mark one box. ► Checking Savings 4. If this refund is going to an account that is located outside of the United States or its territories, mark here. Under penalties of false swearing, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Signature of Officer
X ____________________________________________ Date Printed Name and Title Telephone Number Print/Type Preparer's Name Preparer's Signature Date PTIN ____________________________________ Firm's Name Firm's Address Telephone Number Firm's FEIN If you allow the DOR to discuss this tax return with your tax preparer, mark here. Prepayments Pass-through Entity Tax and Composite Tax Withholding 32 Total 37 Return 38 21 2023 payments 22 2022 overpayment applied to 2023 23 Add lines 21 and 22. Total prepayments 24 T otal taxable income subject to pass-through entity tax from all owners' MT Schedules K-1, Part 4, line 14 (see instructions) 25 T otal pass-through entity tax from all owners' MT Schedules K-1, Part 5, line 1 26 Flow-Through Payments Schedule, Column A, line 12 27 Add lines 23 and 26, then subtract from line 25. Pass-through entity tax due or (overpayment) 28 T otal composite tax from Schedule IV, Column H 29 Flow-Through Payments Schedule, Column B, line 12 30 Add lines 27 and 28, then subtract line 29. Composite tax and pass-through entity tax due or (overpayment) 31 Interest on underpayment of estimated tax (see instructions) 32 T otal pass-through withholding from all owners' MT Schedules K-1, Part 5, line 3a 33 PTE's tax liability resulting from an adjustment to partnership income (see instructions) 34 Flow-Through Payments Schedule, Column C, line 12 35 Add lines 32 and 33, then subtract line 34. Pass-through withholding and other partnership liability due or (overpayment) 36 PTE information return late filing penalty 37 Add lines 30, 31, 35, and 36. Total PTE taxes with interest and/or penalty 38 For amended returns only - previously issued refunds 39 For amended returns only - payments made with original return 40 Add lines 37 and 38, then subtract line 39. 41 Late payment penalty 42 Interest 42 43 Add lines 40 through 42. Total tax, penalties, and interest43 Amount Owed or Refund 44 If line 43 is more than zero, enter the amount here. This is the amount you owe. 44 45 If line 43 is less than zero, enter the amount here. This is your overpayment. 45 46 Enter the amount from line 45 that you want applied to your 2024 tax 46 47 Subtract line 46 from line 45. This is your refund. 47 Example 1:
*23TT0301* *23TT0301* % % % 00 00 00 00 00 Form PTE, Page 3 - 2023 FEIN Flow-Through Payments Schedule Part I. Montana Schedules K-1 received by the pass-through entity reporting mineral royalty withholding, pass-through withholding, and/or pass-through entity tax. Attach a statement with the same information if the PTE received more than four Montana Schedules K-1 reporting mineral royalty withholding, pass-through withholding, and/or pass-through entity tax. Entity Name FEIN A. Mineral royalty withholding received B. Pass-through withholding received C. Pass-through entity tax received 5 Totals Part II. Flow-through payment allocations (See instructions) Schedules K-1 subject to: A. Pass-through entity tax B. Composite tax C. Other 1 Sum of profit and loss percentage of all MT Schedules K-1 subject to applicable Column(s) A, B, and C 2 Multiply total in Part I, Column A by percentage on line 1 for each column 2 3 Mineral royalty withholding passed to owners 3
Enter Column A, line 2 and Column B, line 2. Subtract Column C, line 3 from Column C, line 2. Balance of mineral royalty withholding the PTE can claim as a credit.
Multiply total in Part I, Column B by percentage on line 1 for each column 5 6 Pass-through withholding passed to owners 6
Enter Column A, line 5 and Column B, line 5. Subtract Column C, line 6 from Column C, line 5. Balance of pass-through withholding the PTE can claim as a credit
If Column A, line 1 is greater than 0%, enter the total from Part I, Column C8 9 If Column A, line 1 is 0%, multiply the total in Part I, Column C by Columns B and C, line 1
10 Total pass-through entity tax passed to owners 10
Enter Column B, line 9. Subtract Column C, line 10 from line 9. Credit balance for PTE not electing to pay PTET
Add lines 4, 7, 8, and 11 in each column. Total payments the PTE can claim as a credit
Part III. Authorized Representative: Authorized to make PTET election for Tax Year 2023 Name Title Telephone Number Email ABC LLC X X X X X X X X X 2000 100.0000 Jon Doe Grand Mammoth 1 5 2 2 6 3 2 2 5 5JD@JD.com Example 1:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 1 Owner 1 50.0000 50.0000 50000 30000 50000 30000 Example 1:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Example 1 Owner 2 50.0000 50.0000 50000 30000 50000 30000 Example 1:
*23TT0101* *23TT0101* 3202DDMM YYYYDDMM Y Y YYDDMM Y Y YYDDMM Office Use Only Date Received 2023 Montana Pass-Through Entity Tax Return Include a complete copy of all related federal forms and schedules. Partnership S corporation For calendar year 2023 or tax year beginning and ending Name FEIN Federal Business Code/NAICS Mailing Address MT Secretary of State ID # Date of Registration in Montana City State ZIP Code + 4 State formed in on Form PTE P Enter Number of: Schedules K-1 Included Nonresident Owners Schedules DE Included Resident Owners Other Types of Owners Schedules K-1 Received Federal Schedule K Owners' Distributive Share of Income Items (federal Schedule K) 1 Ordinary business income (loss) 2 Net rental real estate income (loss) (include federal Form 8825) 3a Other gross rental income (loss) 3b Expenses from other rental activities (include detailed statement) 3 Subtract line 3b from line 3a. This is your other net rental income or loss. 4a Guaranteed payments: Services 4b Guaranteed payments: Capital 4 Add lines 4a and 4b This is your total guaranteed payments. 5 Interest income 6 Ordinary dividends 7 Royalties 8 Net short-term capital gain (loss) (include federal Schedule D) 9 Net long-term capital gain (loss) (include federal Schedule D) 10 Net section 1231 gain (loss) (include federal Form 4797) 11 Other income (loss) (include detailed statement) 12 Add lines 1 through 11 and enter result. This is your total federal income or loss. Owners' Distributive Share of Deduction Items (include federal Schedule K) 13a Section 179 deduction (include federal Form 4562) 13b Contributions 13c Investment interest expense 13d Section 59(e)(2) expenditures (include detailed statement) 13e Other deductions (include detailed statement) 13 Add lines 13a through 13e and enter result. This is your total federal deductions. 14 Subtract line 13 from line 12. This is your federal income from all sources.
Montana Source Income
15 Montana additions to the PTE's apportionable activities 16a Montana subtractions from the PTE's apportionable activities 16b Total everywhere income (loss) from federal Schedules K-1 16c Total everywhere income (loss) from disregarded entities 16d Other nonapportionable income (loss) from the PTE's own activities 16 Add lines 16a through 16d. This is your deductions including nonapportionable income. 17 Add lines 14 and 15, then subtract line 16. Schedule I not required: 18 Income (loss) apportioned to Montana. Multiply line 17 x % 19a Total Montana source income received from pass-through entities (Montana source income from MT Schedules K-1 issued to this entity) 19b Total Montana source income from Schedules VII 19c Nonapportionable income allocated to Montana. (See instructions) 19 Add lines 19a through 19c. This is the total nonapportionable income (loss) sourced to Montana. 20 Add lines 18 and 19; enter result. This is your total Montana source income. 3a 3b 4a 4b 13a 13b 13c 13d 13e 16a 16b 16c 16d 19a 19b 19c 2023v1 08/2023 100% Montana activity 0% Montana activity Mark all that apply: Initial return Final return Amended return Refund return Resident PTET Clear Form Case 2 0 1 60.0000 279750 Example 2 - S Corporation Not Making a PTET Election and Receiving a Flow-Through PTET Credit This example features an S Corporation that has two shareholders; Owner 1 is a nonresident and Owner 2 is a resident. The PTE elected to pay PTET of $6,000 in another state but did not make an election to pay the PTET in Montana. Because the PTE does not elect to pay the PTET, the PTET credit is pushed out to all affected owners based on the share of profit and loss. The nonresident owner is subject to PT-WTH. The amount of PT-WTH is 6.75% of the MTSI, reduced by $2,500 of PTET credit. Example 2 also illustrates the distribution of PTET credit when the PTE does not elect to pay the PTET, and the reduction of PT-WTH by the amount of PTET credit reported on the owner's Schedule K-1.
*23TT0201* *23TT0201* Form PTE, Page 2 - 2023 FEIN Direct Deposit Your Refund Complete 1, 2, 3, and 4. (See instructions) 1. RTN# 2. ACCT# 3. If using direct deposit, you are required to mark one box. ► Checking Savings 4. If this refund is going to an account that is located outside of the United States or its territories, mark here. Under penalties of false swearing, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Signature of Officer
X ____________________________________________ Date Printed Name and Title Telephone Number Print/Type Preparer's Name Preparer's Signature Date PTIN ____________________________________ Firm's Name Firm's Address Telephone Number Firm's FEIN If you allow the DOR to discuss this tax return with your tax preparer, mark here. Prepayments Pass-through Entity Tax and Composite Tax Withholding 32 Total 37 Return 38 21 2023 payments 22 2022 overpayment applied to 2023 23 Add lines 21 and 22. Total prepayments 24 T otal taxable income subject to pass-through entity tax from all owners' MT Schedules K-1, Part 4, line 14 (see instructions) 25 T otal pass-through entity tax from all owners' MT Schedules K-1, Part 5, line 1 26 Flow-Through Payments Schedule, Column A, line 12 27 Add lines 23 and 26, then subtract from line 25. Pass-through entity tax due or (overpayment) 28 T otal composite tax from Schedule IV, Column H 29 Flow-Through Payments Schedule, Column B, line 12 30 Add lines 27 and 28, then subtract line 29. Composite tax and pass-through entity tax due or (overpayment) 31 Interest on underpayment of estimated tax (see instructions) 32 T otal pass-through withholding from all owners' MT Schedules K-1, Part 5, line 3a 33 PTE's tax liability resulting from an adjustment to partnership income (see instructions) 34 Flow-Through Payments Schedule, Column C, line 12 35 Add lines 32 and 33, then subtract line 34. Pass-through withholding and other partnership liability due or (overpayment) 36 PTE information return late filing penalty 37 Add lines 30, 31, 35, and 36. Total PTE taxes with interest and/or penalty 38 For amended returns only - previously issued refunds 39 For amended returns only - payments made with original return 40 Add lines 37 and 38, then subtract line 39. 41 Late payment penalty 42 Interest 42 43 Add lines 40 through 42. Total tax, penalties, and interest43 Amount Owed or Refund 44 If line 43 is more than zero, enter the amount here. This is the amount you owe. 44 45 If line 43 is less than zero, enter the amount here. This is your overpayment. 45 46 Enter the amount from line 45 that you want applied to your 2024 tax 46 47 Subtract line 46 from line 45. This is your refund. 47 Example 2:
*23TT0301* *23TT0301* % % % 00 00 00 00 00 Form PTE, Page 3 - 2023 FEIN Flow-Through Payments Schedule Part I. Montana Schedules K-1 received by the pass-through entity reporting mineral royalty withholding, pass-through withholding, and/or pass-through entity tax. Attach a statement with the same information if the PTE received more than four Montana Schedules K-1 reporting mineral royalty withholding, pass-through withholding, and/or pass-through entity tax. Entity Name FEIN A. Mineral royalty withholding received B. Pass-through withholding received C. Pass-through entity tax received 5 Totals Part II. Flow-through payment allocations (See instructions) Schedules K-1 subject to: A. Pass-through entity tax B. Composite tax C. Other 1 Sum of profit and loss percentage of all MT Schedules K-1 subject to applicable Column(s) A, B, and C 2 Multiply total in Part I, Column A by percentage on line 1 for each column 2 3 Mineral royalty withholding passed to owners 3
Enter Column A, line 2 and Column B, line 2. Subtract Column C, line 3 from Column C, line 2. Balance of mineral royalty withholding the PTE can claim as a credit.
Multiply total in Part I, Column B by percentage on line 1 for each column 5 6 Pass-through withholding passed to owners 6
Enter Column A, line 5 and Column B, line 5. Subtract Column C, line 6 from Column C, line 5. Balance of pass-through withholding the PTE can claim as a credit
If Column A, line 1 is greater than 0%, enter the total from Part I, Column C8 9 If Column A, line 1 is 0%, multiply the total in Part I, Column C by Columns B and C, line 1
10 Total pass-through entity tax passed to owners 10
Enter Column B, line 9. Subtract Column C, line 10 from line 9. Credit balance for PTE not electing to pay PTET
Add lines 4, 7, 8, and 11 in each column. Total payments the PTE can claim as a credit
Part III. Authorized Representative: Authorized to make PTET election for Tax Year 2023 Name Title Telephone Number Email ABC LLC X X X X X X X X X 5000 100.0000 John Doe Grand Mammoth 1 5 2 2 6 3 2 2 5 5JD@JD.com Example 2:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 2 Owner 1 50.0000 50.0000 250000 156750 253000 159750 1A B 3000 Example 2:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 2 Owner 2 50.0000 50.0000 250000 156750 253000 159750 1A B 3000 Example 2:
*23TT0101* *23TT0101* 3202DDMM YYYYDDMM Y Y YYDDMM Y Y YYDDMM Office Use Only Date Received 2023 Montana Pass-Through Entity Tax Return Include a complete copy of all related federal forms and schedules. Partnership S corporation For calendar year 2023 or tax year beginning and ending Name FEIN Federal Business Code/NAICS Mailing Address MT Secretary of State ID # Date of Registration in Montana City State ZIP Code + 4 State formed in on Form PTE P Enter Number of: Schedules K-1 Included Nonresident Owners Schedules DE Included Resident Owners Other Types of Owners Schedules K-1 Received Federal Schedule K Owners' Distributive Share of Income Items (federal Schedule K) 1 Ordinary business income (loss) 2 Net rental real estate income (loss) (include federal Form 8825) 3a Other gross rental income (loss) 3b Expenses from other rental activities (include detailed statement) 3 Subtract line 3b from line 3a. This is your other net rental income or loss. 4a Guaranteed payments: Services 4b Guaranteed payments: Capital 4 Add lines 4a and 4b This is your total guaranteed payments. 5 Interest income 6 Ordinary dividends 7 Royalties 8 Net short-term capital gain (loss) (include federal Schedule D) 9 Net long-term capital gain (loss) (include federal Schedule D) 10 Net section 1231 gain (loss) (include federal Form 4797) 11 Other income (loss) (include detailed statement) 12 Add lines 1 through 11 and enter result. This is your total federal income or loss. Owners' Distributive Share of Deduction Items (include federal Schedule K) 13a Section 179 deduction (include federal Form 4562) 13b Contributions 13c Investment interest expense 13d Section 59(e)(2) expenditures (include detailed statement) 13e Other deductions (include detailed statement) 13 Add lines 13a through 13e and enter result. This is your total federal deductions. 14 Subtract line 13 from line 12. This is your federal income from all sources.
Montana Source Income
15 Montana additions to the PTE's apportionable activities 16a Montana subtractions from the PTE's apportionable activities 16b Total everywhere income (loss) from federal Schedules K-1 16c Total everywhere income (loss) from disregarded entities 16d Other nonapportionable income (loss) from the PTE's own activities 16 Add lines 16a through 16d. This is your deductions including nonapportionable income. 17 Add lines 14 and 15, then subtract line 16. Schedule I not required: 18 Income (loss) apportioned to Montana. Multiply line 17 x % 19a Total Montana source income received from pass-through entities (Montana source income from MT Schedules K-1 issued to this entity) 19b Total Montana source income from Schedules VII 19c Nonapportionable income allocated to Montana. (See instructions) 19 Add lines 19a through 19c. This is the total nonapportionable income (loss) sourced to Montana. 20 Add lines 18 and 19; enter result. This is your total Montana source income. 3a 3b 4a 4b 13a 13b 13c 13d 13e 16a 16b 16c 16d 19a 19b 19c 2023v1 08/2023 100% Montana activity 0% Montana activity Mark all that apply: Initial return Final return Amended return Refund return Resident PTET Clear Form Case 3 0 1 60.0000 24000 Example 3 - Resident Election With Flow-Through Payment Allocation, Overpayment This example features a more complex partnership electing the PTET, making the Resident Election, receiving flow-through payments, including the PTET credit, and with one owner participating in a composite tax election. The partnership has six partners; three are affected by the PTET, and three are not. One of the partners is a foreign corporation electing to pay composite tax. Example 3 illustrates the effect of the Resident Election, the allocation of flow-through payments - including when MRW is pushed out - and how the three taxes of PT-WTH, composite tax, and the PTET can be assessed on the same return. It also illustrates an overpayment of the pass-through entity tax, which would possibly be income in the year the refund is received.
*23TT0201* *23TT0201* Form PTE, Page 2 - 2023 FEIN Direct Deposit Your Refund Complete 1, 2, 3, and 4. (See instructions) 1. RTN# 2. ACCT# 3. If using direct deposit, you are required to mark one box. ► Checking Savings 4. If this refund is going to an account that is located outside of the United States or its territories, mark here. Under penalties of false swearing, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Signature of Officer
X ____________________________________________ Date Printed Name and Title Telephone Number Print/Type Preparer's Name Preparer's Signature Date PTIN ____________________________________ Firm's Name Firm's Address Telephone Number Firm's FEIN If you allow the DOR to discuss this tax return with your tax preparer, mark here. Prepayments Pass-through Entity Tax and Composite Tax Withholding 32 Total 37 Return 38 21 2023 payments 22 2022 overpayment applied to 2023 23 Add lines 21 and 22. Total prepayments 24 T otal taxable income subject to pass-through entity tax from all owners' MT Schedules K-1, Part 4, line 14 (see instructions) 25 T otal pass-through entity tax from all owners' MT Schedules K-1, Part 5, line 1 26 Flow-Through Payments Schedule, Column A, line 12 27 Add lines 23 and 26, then subtract from line 25. Pass-through entity tax due or (overpayment) 28 T otal composite tax from Schedule IV, Column H 29 Flow-Through Payments Schedule, Column B, line 12 30 Add lines 27 and 28, then subtract line 29. Composite tax and pass-through entity tax due or (overpayment) 31 Interest on underpayment of estimated tax (see instructions) 32 T otal pass-through withholding from all owners' MT Schedules K-1, Part 5, line 3a 33 PTE's tax liability resulting from an adjustment to partnership income (see instructions) 34 Flow-Through Payments Schedule, Column C, line 12 35 Add lines 32 and 33, then subtract line 34. Pass-through withholding and other partnership liability due or (overpayment) 36 PTE information return late filing penalty 37 Add lines 30, 31, 35, and 36. Total PTE taxes with interest and/or penalty 38 For amended returns only - previously issued refunds 39 For amended returns only - payments made with original return 40 Add lines 37 and 38, then subtract line 39. 41 Late payment penalty 42 Interest 42 43 Add lines 40 through 42. Total tax, penalties, and interest43 Amount Owed or Refund 44 If line 43 is more than zero, enter the amount here. This is the amount you owe. 44 45 If line 43 is less than zero, enter the amount here. This is your overpayment. 45 46 Enter the amount from line 45 that you want applied to your 2024 tax 46 47 Subtract line 46 from line 45. This is your refund. 47 -492 -605 -599 -599 -599 Example 3:
*23TT0301* *23TT0301* % % % 00 00 00 00 00 Form PTE, Page 3 - 2023 FEIN Flow-Through Payments Schedule Part I. Montana Schedules K-1 received by the pass-through entity reporting mineral royalty withholding, pass-through withholding, and/or pass-through entity tax. Attach a statement with the same information if the PTE received more than four Montana Schedules K-1 reporting mineral royalty withholding, pass-through withholding, and/or pass-through entity tax. Entity Name FEIN A. Mineral royalty withholding received B. Pass-through withholding received C. Pass-through entity tax received 5 Totals Part II. Flow-through payment allocations (See instructions) Schedules K-1 subject to: A. Pass-through entity tax B. Composite tax C. Other 1 Sum of profit and loss percentage of all MT Schedules K-1 subject to applicable Column(s) A, B, and C 2 Multiply total in Part I, Column A by percentage on line 1 for each column 2 3 Mineral royalty withholding passed to owners 3
Enter Column A, line 2 and Column B, line 2. Subtract Column C, line 3 from Column C, line 2. Balance of mineral royalty withholding the PTE can claim as a credit.
Multiply total in Part I, Column B by percentage on line 1 for each column 5 6 Pass-through withholding passed to owners 6
Enter Column A, line 5 and Column B, line 5. Subtract Column C, line 6 from Column C, line 5. Balance of pass-through withholding the PTE can claim as a credit
If Column A, line 1 is greater than 0%, enter the total from Part I, Column C8 9 If Column A, line 1 is 0%, multiply the total in Part I, Column C by Columns B and C, line 1
10 Total pass-through entity tax passed to owners 10
Enter Column B, line 9. Subtract Column C, line 10 from line 9. Credit balance for PTE not electing to pay PTET
Add lines 4, 7, 8, and 11 in each column. Total payments the PTE can claim as a credit
Part III. Authorized Representative: Authorized to make PTET election for Tax Year 2023 Name Title Telephone Number Email MRW LLC X X X X X X X X X 100 PTW LLC 1688 PTET LLC 1350 100 1688 1350 72.0000 7.0000 21.0000 72 7 21 72 7 9 1215 118 354 1215 118 354 2637 125 363 John Doe Grand Mammoth 1 5 2 2 6 3 2 2 5 5JD@JD.com Example 3:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 3 Owner 1 7.0000 7.0000 105 53 7000 4200 7105 4253 1A B 105 2A B 53 Example 3:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 3 Owner 2 38.0000 38.0000 570 285 38000 22800 38570 23085 1A B 570 2A B 285 Example 3:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 3 Owner 3 12.0000 12.0000 180 90 12000 7200 12180 7290 1A B 180 2A B 90 Example 3:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 3 Owner 4 7.0000 7.0000 105 53 7000 4200 7105 4253 1A B 105 2A B 53 Example 3:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 3 Owner 5 9.0000 9.0000 135 68 9000 5400 9135 5468 1A B 135 2A B 68 Example 3:
*23TT1101* *23TT1101*
YM D D Y Y YMYM D D Y Y YM % % 00 00
Montana Schedule K-1
(PTE) Owner's Share of Income (Loss), Deductions, Credits, etc. For the calendar year 2023, or tax year beginning and ending
Part 1 PTE Information
Mark applicable boxes: Amended Schedule K-1 Final Schedule K-1 Pass-through Entity's Name Mailing Address City State ZIP Code
Part 2 Owner Information
Name FEIN Mailing Address SSN City State ZIP Code
Owner Type Resident Nonresident Special Allocations (See instructions) Profit and loss percentage The owner is included in a pass-through entity tax election Capital/Ownership Resident owner PTET election (See instructions) The owner is included in a composite income tax return
Part 7 PTE Use
Montana Adjustments Detail: Enter the amount and code of each adjustment entered on Part 3. (See instructions) 1 Code 2 Code 3 Code 4 Code 5 Code 6 Code 7 Code 8 Code 9 Code Part 3 Adj. Montana Adjustments (See worksheet on page 9) A. Everywhere B. Montana 1 Additions 1 2 Subtractions 2
Part 6 Credit Code Credit Authorization Number Amount of credit
Case 3 Owner 6 27.0000 27.0000 405 203 27000 16200 27405 16403 1AB 405 2AB 203 Example 3:
Source: official text