State Pass-Through Entity Taxation Regimes After OBBBA: Reevaluating PTE Elections

About the Course

Introduction

This webinar will analyze state pass-through entity (PTE) tax regimes and the evolving considerations for making entity-level tax elections in light of significant federal tax changes. Our panel of knowledgeable state and local tax (SALT) practitioners will examine when PTE elections enhance federal and state tax outcomes—and when they may create unintended consequences—through detailed, practitioner-focused case studies.

Description

State PTE regimes were widely adopted as a workaround to the $10,000 federal limitation on individual SALT deductions enacted under the Tax Cuts and Jobs Act (TCJA). However, the One Big Beautiful Bill Act, enacted July 4, 2025, materially altered this landscape by increasing the SALT deduction cap to $40,000 (subject to income-based phaseouts beginning at $500,000). As a result, many taxpayers can now obtain significantly greater SALT deductions at the individual level, fundamentally changing the cost-benefit analysis that historically drove PTE elections.

However, PTE tax regimes still benefit owners with income over the $500,000 threshold and those with SALT deductions over the $40,000 cap. Businesses that consistently pay significant state taxes and those with significant income in a particular year still benefit from state PTE relief.

Many state PTE regimes were scheduled to sunset after TCJA. Additionally, several states have revised their policies for taking a SALT deduction at the entity level. State and local tax advisers need to reconsider taking SALT deductions at the entity level to maximize deductions for businesses and their owners.

Listen as our panel of experienced state and local tax professionals addresses recent state PTE developments and new considerations stemming from the increase in the SALT cap.

Credit Information

BARBRI is a NASBA CPE sponsor and this 60-minute webinar is accredited for 1.0 CPE credits.

Date + Time

event
Tuesday, August 18, 2026
schedule
1:00 p.m. ET./10:00 a.m. PT

I. Background

II. Recent federal legislative changes

III. Mandatory PTE taxation

IV. Elective PTE taxation

V. Specific state taxation regimes

VI. Recent developments in specific states' PTE regimes

VII. Analyzing the impact of PTE taxation on owners

VIII. Best practices

The panel will cover these and other critical issues:

Reassessing PTE elections following the increase in the SALT deduction cap to $40,000
Impact of suspended losses, basis limitations, and at-risk rules on PTE benefits
Planning for partnerships with trust, individual, and tiered entity owners
State-by-state differences in credits, deductions, and elective versus mandatory regimes

Learning Objectives

After completing this course, you will be able to:

Identify situations where state PTE tax elections should be avoided
Ascertain how the OBBBA impacts the decision to deduct SALT at the entity level
Decide which states recently updated the requirements for deducting state taxes at the entity level
Determine the interaction of the federal PTE tax deduction and the business interest limitation of IRC 163(j)

Field of Study:
Level of Knowledge:
Advance Preparation: None
Teaching Method: Seminar/Lecture
Delivery Method: Group-Internet (via computer)
Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
Prerequisite:
Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of SALT taxation, nexus and apportionment as it applies to multi-state businesses.

BARBRI, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

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