Side-by-side at $1,000,000 qualified income, 37% bracket

FieldCaliforniaNew York
StatuteCal. Rev. & Tax. Code §§ 17052.10 (credit) and 19900 (tax); A.B. 150 (2021), S.B. 132 (2025 extension)N.Y. Tax Law Article 24-A (§§ 860-866)
Election deadlineElection 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 after January 1 and no later than March 15 of the tax year for which the election is made (postponed to next business day if March 15 is a weekend/holiday). Quarterly estimated payments due March 15, June 15, September 15, and December 15.
Rate9.30% flat6.85% to 10.90% (4 graduated brackets)
Owner creditnon-refundablerefundable
Composite interactionstacksstacks
§199A QBI reductionYesYes
Last verified2026-05-112026-05-11

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).

California — entity tax + federal deduction
QBI·CA rate·Bracket= Federal deduction (gross)
$1,000,000×9%×37%=$34,410

Entity-level tax: $93,000. Net of QBI offset (~$6,882): $27,528.

New York — entity tax + federal deduction
QBI·NY rate·Bracket= Federal deduction (gross)
$1,000,000×7%×37%=$25,345

Entity-level tax: $68,500. Net of QBI offset (~$5,069): $20,276.

Why owners with K-1 income across these two states care

California and New York 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 NY; (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:

Federal anchors