2026 state pass-through entity tax elections, all 50 states and DC

For tax year 2026, 37 states let a partnership or S corporation elect to pay state income tax at the entity level. Thirteen states and DC have no such election. The table below gives the rate, how to elect and the official source for every row. Where no official page we opened gives a 2026 figure, the cell says GAP. We don't fill gaps with guesses.

This page is general information for tax firm owners. It is not tax or legal advice. Check each figure on the state's own page before you use it with a client.

What a PTET election is

A pass-through entity tax (PTET) election lets a partnership or S corporation pay state income tax itself, in place of its owners paying it on their personal returns. Most states that offer one then give owners a credit or an exclusion for the tax the entity paid.

The federal side is the same for every state. IRS Notice 2020-75 says a partnership or S corporation can deduct state income tax it pays at the entity level (IRS Notice 2020-75). That deduction sits at the entity, outside each owner's personal state and local tax (SALT) deduction limit in 26 U.S.C. 164(b)(6).

How to read the table

• Election for tax year 2026 says whether an entity-level election exists for tax years beginning in 2026, according to the official source in that row. Every election in this table is optional. No state in it makes PTET mandatory for 2026.
• Rate. A rate for an earlier year is labelled with that year. If no official page we opened gives the 2026 number, the cell says GAP.
• How and when to elect is a short summary. Deadlines, consent rules and payment rules have detail the summary leaves out, so read the source.
• Checked: the rows were built and rechecked against the official pages between 24 and 25 Oct 2026. On 25 Oct 2026 the Colorado and New Hampshire pages and one Tennessee page did not load for our checker, so those rows rest on our earlier October 2026 read. We will update the page when states publish their 2026 forms and instructions.

The table

Count

37 states have an election for tax years beginning in 2026, counted from the rows above. These 13 states and DC have none: Alaska, Delaware, Florida, Nevada, New Hampshire, North Dakota, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, Washington and Wyoming, plus the District of Columbia.

Notes on specific rows

Note A, Arkansas 2026 rate. Arkansas sets the pass-through entity rate at the top individual rate. No official page we opened states the 2026 entity rate in words, so the table shows the 2024 figure and leaves 2026 open. Read the 2026 AR1100PET instructions when they come out.

Note B, Hawaii. The Hawaii Department of Taxation says the rate for tax year 2024 and later is 9%, under Act 50, SLH 2024. The same act limits qualified members to individuals, trusts and estates and allows credits to carry forward (Hawaii PTE page).

Note C, end dates that changed in 2026. Older summaries list Minnesota and Oregon as ending after 2025 and Virginia after 2026. The state sources say otherwise. Minnesota Revenue says the election is available for tax years beginning before 1 Jan 2028 (Minnesota Revenue). Oregon SB 1510 moved the end to tax years beginning before 1 Jan 2028 (Oregon DOR). The Virginia Code, as amended in 2026 (c. 7), sets no end year for the election (Code of Virginia 58.1-390.3). Use the state's own page over any national map.

Note D, Connecticut's earlier years. Connecticut's tax is elective for 2026 (Connecticut DRS). Whether it was mandatory in earlier years is a GAP: we did not confirm that on an official page.

Gaps we could not close

These are open on purpose. Each one needs an official page that states the figure, and we didn't find one.

• 2026 rate not yet published on any official page we opened: Arizona, Colorado, Idaho, Iowa, Kentucky, Mississippi, Missouri, Nebraska, New Mexico, Utah and West Virginia. Arkansas is close to this list (see note A).
• District of Columbia: final status of Bill B26-0324.
• Connecticut: whether earlier years were mandatory (note D).
• Vermont: we checked S.282 and found no PTET passed. We did not check every other 2026 Vermont act.

Other things that matter for 2026 planning

• Washington has no individual income tax today. The Department of Revenue says a 9.9% income tax starts 1 Jan 2028 under SB 6346 (Washington DOR). Nothing changes for 2026.
• Massachusetts says both of its excises end if the federal SALT limit ends (Mass.gov).
• Deadlines vary a lot. New York closes its election on 15 March of the tax year itself (16 March in 2026), while Utah wants the report and payment by the last day of the tax year (New York PTET; Utah SALT FAQ). A firm that waits for the return to raise the question can miss both.

Using this with clients

A PTET election is one of the clearest reasons to put a planning meeting on an owner's calendar before the year ends. The decision depends on the owner's state, how many owners there are, where they live and what each state's credit rules say. Those are planning questions, and they come with a fee.

If you are working out how to raise it with owners, these guides help:

• How to explain tax planning to business owners
• The year end tax planning letter
• How to sell tax planning without promising savings
• How to get more tax planning clients
• Accounting firm niches for tax planning
• Tax planning clients by state, with pages for California, Florida, Illinois, New York and Texas
• Glossary of tax planning terms

About Financial Sales Insider

Financial Sales Insider is a marketing company that fills US CPA and EA firms' calendars with qualified tax planning meetings. We contact and qualify each enquiry against your written criteria before anyone is booked on your calendar.

See if your firm is a fit

Johnny Logan, Founder, Financial Sales Insider. General information for tax firm owners. Not tax or legal advice.

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