Indiana passed legislation in 2023 that provides a potential Federal tax savings opportunity to Indiana taxpayers who own a pass-through entity filing as an S-Corporation or a Partnership. Starting for the 2022 tax year, business 
owners were able to take advantage of this opportunity on their businesses’ state tax returns through the Pass-Through Entity Tax election (PTET).
Because this is an annual election, those wishing to utilize this opportunity for the 2023 tax year must make a single estimated payment by December 31, 2023.
For 2023, the state has mandated that 50% of the tax imposed for the taxable year must be paid to avoid underpayment penalties.
Below are some frequently asked questions.
Am I eligible to make the 2023 PTET Election?
- Yes – Any partnership or S-Corporation may make this election.
- We see the most benefit for shareholders if the entity has at least $100,000 of state taxable income.
How do I know the amount I should pay?
- To avoid underpayment penalties, 50% of the 2023 tax must be paid by 12.31.23.
- BGBC Recommendation: Calculate 3.15% of projected tax income and pay this amount to maximize federal benefit.
- Option 2: If income is expected to increase and no projection is completed, pay 100% of the 2022 tax owed.
- Option 3: If income is expected to decrease and no projection is completed, pay 50% of the 2022 tax owed.
How do I make the payment?
Pay online via IN Time (Click Here).
- Whether you made an election in 2022 or are a first time elector for 2023, you can make the estimated payment online without an account.
- Choose “Make A Payment” then select your preferred option under “Non-Bill Payments.”
- Follow the prompts to complete the Composite Withholding (IT-6WH) payment.
Pay using Form IT-6WH if you receive one in the mail.
- Fill in all missing information, including the amount you are paying.
- Sign and date the voucher.
- Mail the voucher with check to INDOR.
Whatever amount is paid, please either provide proof of payment to your tax advisor or clearly identify the payment in the financial records
If you need assistance with planning for this election, please contact us.