Starting with tax year 2024, the pass-through entity tax is optional. Connecticut allows pass-through entities (S corporation or partnerships) to elect to pay tax at the entity level using the CT-PET, Connecticut Pass-Through Entity Return. The election is made annually on Form CT-1065/CT-1120SI, Connecticut Composite Income Tax Return. This election cannot be amended or revoked once made. Members of the pass-through entity are eligible for a non-refundable credit on their individual return.

1065

Make the election by checking the Pass-Through Entity (PET) Return box at the top of CT screen 1. When elected, CT-PET will calculate pass-through entity tax due on Page 1, line 2. Overrides for members are available on the Part 1, Sch D screen. Review the calculation on CTPET, line 2 (tax due), CTPTE page 2, line 5d and CTPTE, page 8.

1120-S

Make the election by checking the Pass-Through Entity (PET) Return box at the top of CT screen 1. When elected, CT-PET will calculate pass-through entity tax due on Page 1, line 2. Overrides for members are available on the Part 1, Sch D screen. Review the calculation on CTPET, line 2 (tax due), CTPTE page 2, line 5d and CTPTE, page 8.

Estimates

If PET is elected, and the required annual payment for the pass-through entity is equal to or greater than $1,000, estimated payments are required to be made. Use federal screen ES to generate estimates.

e-Filing

e-Filing through Drake Tax is available.

Extension

To generate an extension, use the CT EXT screen. Make sure that the PET EXT is showing a green check when you calculate. 

1040

To enter credit information, use the CTPE screen. Review the amounts on CT-PE and Form CT-1040, line 20c or CT 1040NR/PY, line 22b.

For more information, see the CT DOR.