What is the Oklahoma PTET rate?

Oklahoma's PTET rate is 4.75% flat. 4.75% on ordinary income; 4% on capital gains (per current 514/512-S instructions). PTE rate equals OK top individual rate.

Is the Oklahoma owner credit refundable?

Oklahoma's PTET owner credit is refundable. [PLACEHOLDER: state DOR cite] — Electing PTE is NOT required to withhold income tax from distributions to nonresident members (because PTE tax is paid at entity level).

Does Oklahoma PTET affect composite-return filing?

Forced-out. Electing PTE need not withhold for nonresident members; nonresident agreement requirement waived. See the composite-vs-PTET page for the full matrix.

Oklahoma · OK

Oklahoma Pass-Through Entity Tax (PTET)

Oklahoma'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.

Statute: 68 Okla. Stat. §§ 2355.1P-1 through 2355.1P-4 (Entity Tax Equity Act of 2019); HB 3559 amended § 2355.1P-4
State DOR portal: https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/businesses/corporate-income-tax/current/514-Pkt.pdf
Election deadline: Election made by filing Form 586 OR by making the election on Form 514 (partnership) or 512-S (S corp). Election may be made any time during the tax year or 2 months and 15 days after end of tax year. Beginning tax year 2024, election may be made by filing a timely return (with extensions).
Election form: Form 586 (Election); Form 514 (Partnership Information Return) or 512-S (S Corp); Supplement 587-PTE
Entity-level rate: 4.75% — 4.75% on ordinary income; 4% on capital gains (per current 514/512-S instructions). PTE rate equals OK top individual rate.
Eligible entities: s-corp, partnership, llc-as-s, llc-as-partnership
Owner credit: refundable — [PLACEHOLDER: state DOR cite] — Electing PTE is NOT required to withhold income tax from distributions to nonresident members (because PTE tax is paid at entity level).
Composite interaction: forced-out — Electing PTE need not withhold for nonresident members; nonresident agreement requirement waived.
§199A QBI base reduction: Yes — Reduces federal flow-through income (Notice 2020-75).
Last verified: 2026-05-11

Source: oklahoma.gov/tax — Form 586 + 514-Pkt + 587-PTE. OK was the 2nd state to enact PTET (2019, post-LA).

IRC §164(b)(6)Notice 2020-75 IRC §199A

Reference computation

For a Oklahoma 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:

Oklahoma — reference example

QBI allocation·OK rate= Entity-level tax

$500,000×5%=$23,750

68 Okla. Stat. §§ 2355.1P-1 through 2355.1P-4 (Entity Tax Equity Act of 2019); HB 3559 amended § 2355.1P-4

Entity tax·Federal bracket= Federal deduction (gross)

$23,750×37%=$8,788

At a 37% federal bracket, the entity-level deduction saves $8,788 in federal tax. Net of §199A QBI offset (~20% × bracket × entity tax = $1,758), aggregate benefit is approximately $7,030.

IRS Notice 2020-75

Run the picker pre-filled for Oklahoma

Election walkthrough

Verify eligibility. Oklahoma accepts: s-corp, partnership, llc-as-s, llc-as-partnership.
Check the deadline. Election made by filing Form 586 OR by making the election on Form 514 (partnership) or 512-S (S corp). Election may be made any time during the tax year or 2 months and 15 days after end of tax year. Beginning tax year 2024, election may be made by filing a timely return (with extensions). Form 514 due 15th day of 3rd month after close of tax year (March 15 calendar-year filers); 512-S same.
Compute the entity-level tax. Apply the 4.75% rate to qualified net income.
Pay and file. Use Form 586 (Election); Form 514 (Partnership Information Return) or 512-S (S Corp); Supplement 587-PTE. Quarterly estimates may be required.
Owners claim the state credit. refundable credit on the personal state return.
Verify composite interaction. Composite interaction: forced-out. 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.

Oklahoma PTET — common questions

Annual deadline reminder

State PTET law revises annually. Oklahoma's data was last verified on 2026-05-11. Re-confirm with the state DOR primary source before electing or filing. Last full-site review: 2026-05-12.

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Reference computation

For a Oklahoma 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:

Entity tax·Federal bracket= Federal deduction (gross)

$23,750×37%=$8,788

At a 37% federal bracket, the entity-level deduction saves $8,788 in federal tax. Net of §199A QBI offset (~20% × bracket × entity tax = $1,758), aggregate benefit is approximately $7,030.

IRS Notice 2020-75

Election walkthrough

Verify eligibility. Oklahoma accepts: s-corp, partnership, llc-as-s, llc-as-partnership.

Check the deadline. Election made by filing Form 586 OR by making the election on Form 514 (partnership) or 512-S (S corp). Election may be made any time during the tax year or 2 months and 15 days after end of tax year. Beginning tax year 2024, election may be made by filing a timely return (with extensions). Form 514 due 15th day of 3rd month after close of tax year (March 15 calendar-year filers); 512-S same.

Compute the entity-level tax. Apply the 4.75% rate to qualified net income.

Pay and file. Use Form 586 (Election); Form 514 (Partnership Information Return) or 512-S (S Corp); Supplement 587-PTE. Quarterly estimates may be required.

Owners claim the state credit. refundable credit on the personal state return.

Verify composite interaction. Composite interaction: forced-out. 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.

Oklahoma PTET — common questions