PASS-THROUGH ENTITY – STATE AND LOCAL TAXES DEDUCTION (SALT)

General information The Pass-Through Entity Tax (PTET) deduction allows partnerships and S corporations to deduct state and local income taxes (SALT) imposed on and paid by the entity. This deduction occurs at the entity level, reducing non-separately stated taxable income before it is distributed to partners or shareholders. It effectively bypasses the $10,000 SALT deduction cap that applies to individual taxpayers.