7 changes tracked
We track legislative changes that affect picker output: rate changes, deadline changes, credit-treatment changes, sunset / extension events, and structural shifts (new jurisdictions, revocation flexibility, etc.). Federal changes that affect the workaround economics are listed under FEDERAL.
Virginia removes PTET sunset; now permanent
The Virginia 2026 Appropriation Act removed the prior sunset on the Virginia Pass-Through Entity Tax election, making the regime permanent. The 5.75% rate, refundable owner credit, and existing election deadline remain unchanged.
NYC PTET continues parallel to NY State election
The NYC Pass-Through Entity Tax (NYC Admin Code §11-1901 et seq., enacted 2022) continues to operate as a parallel layer on top of the NY State PTET. NYC-resident owners of entities that have elected NY State PTET may separately elect NYC PTET at a 3.76% city-level rate on city-source income. The NYC election is filed alongside the state election via NY State Tax Online Services.
New York PTET graduated rates unchanged for 2026
The New York State PTET graduated rate schedule (6.85% on first $2M, 9.65% on $2M–$5M, 10.30% on $5M–$25M, 10.90% above $25M) carries forward unchanged for 2026 elections. Annual election deadline remains March 15 of the tax year; quarterly estimated payments due March 15, June 15, September 15, and December 15.
New Jersey BAIT graduated brackets carry forward to 2026
The New Jersey Business Alternative Income Tax (BAIT) graduated rate schedule (5.675% on first $250K, 6.52% on $250K–$1M, 9.12% on $1M–$5M, 10.9% above $5M) continues unchanged into 2026. The March 15 election deadline, quarterly estimate cadence (April 15 / June 15 / September 15 / January 15), and refundable owner credit against NJ Gross Income Tax remain in place.
OBBBA raises SALT cap to ~$40K joint with phaseout; preserves PTET
The One Big Beautiful Bill (signed July 2025) raised the IRC §164(b)(6) individual SALT-deduction cap from $10,000 to approximately $40,000 joint for tax years 2025–2029, with a $500,000 MAGI phaseout that grinds the cap back to $10,000 for the highest earners. The cap reverts to $10,000 in 2030 unless reauthorized. The PTET workaround mechanic under IRS Notice 2020-75 is explicitly preserved. For pass-through owners above the phaseout (essentially anyone with PTET-level state tax), the workaround economics still hold.
California extends PTE Elective Tax through 2030
Senate Bill 132 (signed June 2025) extends California's Pass-Through Entity Elective Tax to taxable years beginning on or after January 1, 2026 and before January 1, 2031. The 9.3% rate, June 15 prepayment requirement (greater of 50% of prior-year PTE tax or $1,000), and partial-refundable owner credit mechanics carry forward unchanged. The extension closes the 2026-cliff that would otherwise have ended PTET in CA.
Mississippi adds mid-cycle PTET revocation flexibility
Mississippi DOR clarified (Form 84-381 instructions) that entities may revoke a Mississippi PTE election mid-cycle via a properly-filed amended election. Most peer states make the election annual + irrevocable; Mississippi's flexibility is an outlier and useful for owners whose facts change mid-year.
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