3 Key Improvements To Maryland Pass-Through Entity Tax

Law360 (March 23, 2021, 12:18 PM EDT) -- For all taxable years beginning after Dec. 31, 2019, a pass-through entity, or PTE, with Maryland-source income now can elect to be taxed at the PTE level, rather than the owner level, with respect to its owners on the PTE's Maryland-source income for Maryland state and local income tax purposes.[1]

The election is intended to circumvent the $10,000 limit on the federal deductibility of state and local taxes imposed by the Tax Cuts and Jobs Act, which has hit high-income tax states such as Maryland very hard. 

The key provision of the Maryland legislation permits a PTE to elect to shift...

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