Side-by-side at $1,000,000 qualified income, 37% bracket
| Field | California | New Jersey |
|---|---|---|
| Statute | Cal. Rev. & Tax. Code §§ 17052.10 (credit) and 19900 (tax); A.B. 150 (2021), S.B. 132 (2025 extension) | Pass-Through Business Alternative Income Tax Act, N.J.S.A. 54A:12-1 et seq. |
| Election deadline | Election made on a timely-filed original return (including extensions) by filing Form FTB 3804 with the entity return. Required initial prepayment due June 15 of the taxable year; for the 2026 election, that prepayment must be the greater of 50% of prior-year PTE tax or $1,000. | Annual election made on or before the original due date of the entity's return (15th day of the 3rd month following close of tax year — March 15 for calendar year). Quarterly estimated payments required on Form PTE-150. |
| Rate | 9.30% flat | 5.675% to 10.90% (4 graduated brackets) |
| Owner credit | non-refundable | refundable |
| Composite interaction | stacks | stacks |
| §199A QBI reduction | Yes | Yes |
| Last verified | 2026-05-11 | 2026-05-11 |
Reference federal-arbitrage computation
Both scenarios assume $1,000,000 qualified net income, a 37% owner federal bracket, and no apportionment. Both reduce §199A QBI base proportionally; net benefit shown is the federal SALT-arbitrage less the rough QBI offset (~20% × bracket × entity tax).
Entity-level tax: $93,000. Net of QBI offset (~$6,882): $27,528.
Entity-level tax: $63,087. Net of QBI offset (~$4,668): $18,674.
Why owners with K-1 income across these two states care
California and New Jersey interact in three ways that matter to a multi-state K-1 holder: (1) independent elections — each state's PTET is its own election with its own deadline and form, so a missed CA deadline does not affect NJ; (2) aggregate federal deduction — the entity-level tax paid to BOTH states is deductible at the federal entity level under IRS Notice 2020-75, so the federal arbitrage compounds; (3) composite-return interaction may differ — see each state's row above.
Run the multi-state picker pre-filled with both jurisdictions: