With the Form PTE original due date around the corner, the department has compiled a list of common errors to avoid when filing the form. These errors are items that have been identified by the preparer community and by the department while processing returns.
We work closely with software vendors and have notified them of the items on this list to ensure correct programming of the Form PTE. However, it may take software vendors some time to rectify these issues. In the meantime, please be aware of the following issues when you submit a Form PTE.
Pass-Through Entity Tax (PTET) Reporting
Page 1. PTET is an election and not required to file a Form PTE. We have received reports of some software requiring the election and have communicated the need to rectify this issue. If your software is requiring you to make a PTET election, Resident PTET election, or both, please contact your vendor representative.
PTET Elections on the Schedule K-1. If you make a PTET election or a resident PTET election on page 1, you must also mark those boxes on the affected owners’ Schedules K-1.
PTET Authorized Representative. If you are a pass-through entity making an election to pay pass-through entity tax, remember to designate an authorized representative to make the pass-through entity election on Flow-Through Payments Schedule, Part III. You are required to designate an authorized representative who can discuss the election with the department.
PTET Credit Calculation. If a loss is reported on Schedule K-1, Part 4, line 14, an amount shouldn’t generate in Part 5, line 1. Please check this line to ensure it is calculating correctly before submitting your return.
Form PT-AGR. Form PT-AGR is not required to make a PTET election. However, some software vendors insist that it be attached to the Form PTE. If your software vendor is requiring you to attach a Form PT-AGR, you can attach a previously submitted PT-AGR or a statement. Note that any new Form PT-AGR must be filed separately from the Form PTE.
Schedule K-1
Special Allocations. Special allocations must be specified on the Schedule K-1 for partners with a special allocation. Mark the Special Allocation checkbox on the Schedule K-1 for any partner that has a special allocation for income/loss that does not follow the profit/loss percentage.
Part 4, Line 14 Calculation. We have seen several returns that do not correctly report the distributive share of income on line 14. This line is the sum of all income (Part 4, lines 1 through 11) and Montana additions, less any Montana subtractions and Part 4, lines 12 and 13. Please ensure this line calculates correctly before submitting your return.
For more information or to contact DOR
Please report suspected software malfunctions to your software vendor support desk and to DORe-Services@mt.gov.
For any other issues you experience when filing Form PTE, please contact DORe-Services@mt.gov.
You can also contact DORpassthrough@mt.gov so we can work with vendors to correct these issues.