https://www.tax.ny.gov/pdf/memos/ptet/m21-1c-1i.pdf
The state provides instructions on how to arrive at PTE taxable income for resident and non-resident partners.
Assume two shareholders - 1 NY resident, 1 CA resident.
Assume $500k of S corp fed income.
$250k is allocated to NY resident subject to NY tax
$150 is allocated to NY non-resident based on apportionment
Total NY PTE taxable income is $400k
PTE tax @ 6.85% =$27,400
Per link at top, page 6, (and my software - Drake - is doing this as well):
If the electing entity is an S corporation, each eligible taxpayer’s PTET credit is
computed by multiplying the electing entity’s total PTET by the eligible taxpayer’s ownership
percentage.
Based on this, the NR is going to receive a lot more credit than he's going to owe in NY and the resident shareholder is short.
I'm assuming they did this to ensure proper S corp treatment (pro-rata allocation)? CA is allowing the allocation to the NR shareholder based on apportioned numbers (with a check-box in Drake)...maybe it's a use at your own risk checkbox.
It may not make sense to elect NY PTE for this S corp. Any thoughts?