Side-by-side at $1,000,000 qualified income, 37% bracket
| Field | Illinois | Indiana |
|---|---|---|
| Statute | 35 ILCS 5/201(p) (IL Income Tax Act PTE election); effective tax years ending on or after December 31, 2021 | Ind. Code IC 6-3-2.1 (Pass-Through Entity Tax); SEA 2 (2023), retroactive to tax years beginning 2022 |
| Election deadline | Annual election made on a timely-filed original Form IL-1065 or IL-1120-ST (including extensions). Election is irrevocable after the extended due date. | [PLACEHOLDER: state DOR cite] — Form IN-PTET election deadline to be pinned to in.gov/dor/files/ptet-instructions.pdf. |
| Rate | 4.95% flat | 2.95% flat |
| Owner credit | refundable | refundable |
| Composite interaction | stacks | stacks |
| §199A QBI reduction | Yes | Yes |
| Last verified | 2026-05-11 | 2026-05-12 |
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: $49,500. Net of QBI offset (~$3,663): $14,652.
Entity-level tax: $29,500. Net of QBI offset (~$2,183): $8,732.
Why owners with K-1 income across these two states care
Illinois and Indiana 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 IL deadline does not affect IN; (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: