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.
- 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).
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:
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.
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
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.