Side-by-side at $1,000,000 qualified income, 37% bracket
| Field | Massachusetts | Connecticut |
|---|---|---|
| Statute | Mass. Gen. Laws c. 63D §§ 1–7 (Elective Pass-Through Entity Excise) | Conn. Gen. Stat. § 12-699 (Pass-Through Entity Tax) |
| Election deadline | Annual election made on a timely-filed Form 63D-ELT (filed with Form 355S, Form 3, or Form 2 as applicable) on or before the due date including extensions. Cannot be made on an amended return. | For tax years beginning on or after January 1, 2024, the PTE tax is OPTIONAL (it was mandatory 2018–2023). Election made by written notice to the Commissioner no later than the due date (or extended due date) of the return; checking the box on a timely-filed Form CT-PET constitutes notice. |
| Rate | 5.00% flat | 6.99% flat |
| Owner credit | refundable | non-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: $50,000. Net of QBI offset (~$3,700): $14,800.
Entity-level tax: $69,900. Net of QBI offset (~$5,173): $20,690.
Why owners with K-1 income across these two states care
Massachusetts and Connecticut 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 MA deadline does not affect CT; (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: