Nebraska pass-through entity tax (Ptet)
Maximizing Nebraska Tax Savings
HBE is here to guide you through the new Pass-Through Entity Tax (PTET) Election in Nebraska. With our expertise and personalized support, we can help you navigate the complexities of this election and maximize your tax savings.
Understanding the PTET Election
Nebraska recently joined 35 other states in enacting the PTET Election, allowing pass-through entities (S-Corps and Partnerships) to pay and deduct Nebraska income taxes at the entity level, creating a federal tax deduction for the taxes paid. This is particularly beneficial for business owners who faced limitations on deducting state and local taxes following the Tax Cuts and Jobs Act (TCJA), beginning in 2018.
It is important for our clients to understand that this new law requires them to take certain actions to ensure compliance and take advantage of the tax benefits. To benefit from the PTET Election in the current year, timing of both the election and tax payment is crucial.
- September 7, 2023 – Nebraska PTET Election: Reducing Tax Liability for Business Owners
- June 1, 2023 – Nebraska Introduces PTET Law and Lowers Income Tax Rates
July 11, 2023 – Leveraging Nebraska’s Tax Changes for a Competitive Advantage
Our Expert Approach
At HBE, our top priority is to help our clients maximize the tax savings that may be available through the PTET Election. We understand that the process of determining impact and completing the election process can be daunting. Our comprehensive approach, summarized below, provides the clarity you need to fully understand and take advantage of the PTET Election.
Cash Flow Projection
Customized Cash Flow Planning
- Engagement Letter. Once you’ve determined that the PTET Election may apply to your company and would like to understand the benefits of the election as well as the mechanics, we will send you an engagement letter for electronic signature.
- Analysis. Upon receipt of your engagement letter, we’ll perform a thorough analysis of your prior year tax returns (2018 through 2022) and current year projected income to understand the Nebraska taxable income of the entity.
- Savings Calculation. After completing the initial analysis, we will then calculate the savings that the PTET Election could help generate for the owners of the business.
- Cash Flow Projection. Our calculation will also highlight the timing issues related to cash from implementing the PTET. This calculation can be shared with other partners and shareholders in your company so they also have an understanding of the impact.
- Election Forms. Should you choose to proceed with the PTET Election, we will help prepare the election forms and guide you through the process of submitting the election and tax payments online to the Nebraska Department of Revenue.
- Customized Cash Flow Planning. Although retroactive PTET Elections can lead to substantial tax savings, they may pose cash flow challenges. We’ll help you understand the timing of the cash flow impacts and identify strategies to mitigate the impact that are tailored to your unique situation.
Our PTET Team
We have assigned a team of expert tax professionals to provide support and assistance specifically to clients who may be impacted by the PTET Election. This team is led by partners who have deep experience in specialized State and Local Tax (SALT) planning. Together, with additional credentialed SALT and tax department professionals, the team provides an unmatched level of expertise in delivering tailored guidance and planning tools, allowing you to successfully maximize your PTET tax savings and manage business impact.
We are Here to Help
Don’t miss out on the opportunity to maximize your tax savings through the Nebraska PTET Election. Our knowledgeable team is here to help you make the most of this tax-saving opportunity. Given the importance to timing, it is important to begin planning sooner rather than later. Please reach out to your trusted HBE advisor as soon as possible to get started.
If you are not currently an HBE client and would like more information about how HBE could help your business through proactive tax guidance, including with the implementation of PTET Elections, please contact our office at (402) 423-4343.
Additional Specialized Advisory Services
- Business Valuation
- Business Transition, Succession, and Wealth Transfer Consulting
- Budgeting, Forecasts, Projections, and Cash Flow Analysis
- Consulting on Changes in Organizational Structure/Entity Selection
- Strategic Planning
- Benchmarking and Analytic Review