MA credit for CA PET? Berkshire CPA - can you help?

Technical topics regarding tax preparation.
#1
ocdtax  
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I know some of the PTE states have published "substantially similar" states where they recognize other states' PTE taxes for purposes of resident credit for taxes paid to other jurisdictions. I have not found that lovely list of substantially similar states in the case of MA. We use UltraTax and we have a MA resident where the software is not bringing over the CA PET taxes when calculating the credit for taxes paid to other states. We can override it, but before we do, I wanted to ask if anyone has experience with this in particular.
 

#2
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Ocd

I am back looking into this issue. ProFx attempted to get back to me on like April 10 on the issue and I was so far in the weeds that I did not have the time to work with them.

It does appear that was some directive from Massachusetts not to allow the PTE tax credits as if they were taxes paid by an individual. CT has had this tax for years and ProFX always allowed it from 2018-2020 but in 2021 it changed.


It does not make sense what Massachusetts is saying in that they are trying to argue that a tx deduction nullifies a dollar for dollar tax credit.

I have been overridng the Massachusetts Credit Manager and the worksheet being generated shows the correct amount of income being reported and state tax being paid so I am not sure how MA will be able to decipher what state tax is paid with a PTE and what is regular state taxes.

Either way taxpayers are being screwed. I am shocked this is not a bigger issue but maybe when the whales start filing their returns it becomes more of an issue

Did Ultra Tax change the way they treated it from 2020? That tells me it is coming from Massachusetts
 

#3
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I did find this now I will look for any updates

https://www.mass.gov/directive/directiv ... entity-tax
 

#4
ocdtax  
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Thank you, Berkshire. We are adding back the state tax deduction for purposes of the state's allocable income so it seems ok to take the resident credit as long as that is being done. That's how I read it anyway. UltraTax is completely unreliable with states like Massachusetts. We've found so many errors over the years and when we call them in to support, no one seems to care. Thank you for responding to this post. Appreciate it!
 


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