Indiana Pass-Through Entity Tax (PTET)
Indiana's PTET regime is one of the 37+ state workarounds to the federal SALT cap (IRC §164(b)(6)). The election is annual, statute-pinned below, and interacts with composite filing and §199A QBI in state-specific ways.
- State DOR portal
- https://www.in.gov/dor/tax-forms/other-forms/ptet/
- Election deadline
- [PLACEHOLDER: state DOR cite] — Form IN-PTET election deadline to be pinned to in.gov/dor/files/ptet-instructions.pdf.
- Election form
- Form IN-PTET (Pass Through Entity Tax Election); IT-20S (S corp) or IT-65 (partnership)
- Entity-level rate
- 2.95% — IN DOR PTET FAQ ('The tax rate would be the same as the individual income tax rate for the tax year') + IN DOR Rates Fees & Penalties ('Indiana Individual adjusted gross income tax rate for 2026 is 2.95%')
- Eligible entities
- s-corp, partnership, llc-as-s, llc-as-partnership
- Owner credit
- refundable
- Composite interaction
- stacks
- §199A QBI base reduction
- Yes — Reduces federal flow-through income (Notice 2020-75).
- Last verified
- 2026-05-12
Source: in.gov/dor/tax-forms/other-forms/ptet/ + Form IN-PTET (forms.in.gov/Download.aspx?id=15526). IN was a late adopter (2023, retroactive to 2022).
Reference computation
For a Indiana pass-through entity with $500,000 of qualified net income allocated to this state, at a 37% federal marginal bracket, the entity-level PTET and federal-deduction math is:
At a 37% federal bracket, the entity-level deduction saves $5,458 in federal tax. Net of §199A QBI offset (~20% × bracket × entity tax = $1,092), aggregate benefit is approximately $4,366.
Election walkthrough
- Verify eligibility. Indiana accepts: s-corp, partnership, llc-as-s, llc-as-partnership. Estates and trusts cannot elect.
- Check the deadline. [PLACEHOLDER: state DOR cite] — Form IN-PTET election deadline to be pinned to in.gov/dor/files/ptet-instructions.pdf. Estates and trusts cannot make the PTET election themselves (but can pass through PTET to beneficiaries).
- Compute the entity-level tax. Apply the 2.95% rate to qualified net income.
- Pay and file. Use Form IN-PTET (Pass Through Entity Tax Election); IT-20S (S corp) or IT-65 (partnership). Quarterly estimates may be required.
- Owners claim the state credit. refundable credit on the personal state return.
- Verify composite interaction. Composite interaction: stacks. See composite vs PTET.
- Run the federal §199A QBI math. PTET reduces the QBI base proportionally; net the federal SALT-arbitrage against the §199A offset.
Indiana PTET — common questions
State PTET law revises annually. Indiana's data was last verified on 2026-05-12. Re-confirm with the state DOR primary source before electing or filing. Last full-site review: 2026-05-12.