Kentucky PTE

The Kentucky Form PTE (Pass-Through Entity Income and LLET Return) is the official tax document used by pass-through entities—such as partnerships, S corporations, and limited liability companies (LLCs)—to report their income, deductions, and tax liabilities to the Kentucky Department of Revenue. Unlike traditional C corporations that pay income tax at the entity level, pass-through entities typically “pass” their income and tax obligations to their owners or partners. However, in Kentucky, these entities are often subject to the Limited Liability Entity Tax (LLET), a specific tax based on the gross receipts or gross profits of the business. This form serves a dual purpose: it calculates the LLET owed by the entity itself and reports the ordinary income or loss that will be distributed to the owners via Schedule K-1. Filing the Form PTE is mandatory for any pass-through entity doing business in Kentucky, ensuring compliance with state laws regarding both entity-level taxation and the transparent reporting of owner shares.

How To File Kentucky PTE Form

To file the Form PTE, you must submit the completed return to the Kentucky Department of Revenue. The deadline usually aligns with the federal tax deadline (often the 15th day of the 4th month following the close of the tax year).

• Payment: If you owe tax, make your check payable to the “Kentucky State Treasurer.”
• Mailing Addresses:
  • With Payment: Mail to Kentucky Department of Revenue, Frankfort, KY 40620-0021.
  • Refunds or No Payment: Mail to Kentucky Department of Revenue, Frankfort, KY 40618-0010.
• Electronic Payment: You can pay online via the Department of Revenue’s website at revenue.ky.gov.

How To Complete Kentucky PTE Form

Follow these detailed steps to complete the form accurately.

Header Section: Entity Identification

• Name and Address: Enter the full legal name, street address, city, state, and ZIP code of the pass-through entity.
• Tax Year: Specify the calendar year or the fiscal year beginning and ending dates.
• Account Numbers: Enter your 9-digit Kentucky Corporation/LLET Account Number (starting with zeros if needed) and your Federal Employer Identification Number (FEIN).
• Business Details: Fill in the NAICS code, state of organization, date of organization, and principal business activity in Kentucky.
• Entity Type: Check the box that matches your structure: Partnership, S Corporation, General Partnership, LLC, LP, or LLP.
• Status Boxes: Mark if this is an Initial Return, Final Return, Amended Return, Change of Name, or Change of Accounting Period.
• Owner Info: Enter the number of Schedule K-1s issued to residents, nonresidents, and other owners.

Part I: Ordinary Income (Loss) Computation

• Line 1: Enter the federal ordinary income (loss) from your federal return (Form 1065 or 1120S).
• Additions (Lines 2–11): Add back items taxed by Kentucky but not federal law.
  • Line 2: Add state taxes based on income that were deducted federally.
  • Line 3: Add back federal depreciation (excluding Section 179 expense).
  • Line 11: Sum Lines 1 through 10 to get the total income before subtractions.
• Subtractions (Lines 12–20): Subtract items not taxed by Kentucky.
  • Line 13: Enter allowable Kentucky depreciation.
  • Line 20: Sum Lines 12 through 19 for total subtractions.​
• Line 21 (Kentucky Ordinary Income): Subtract Line 20 from Line 11 to determine your Kentucky ordinary income or loss.

Part II: LLET Computation

• Line 1: Enter the LLET amount calculated from Schedule L, Section E, Line 1 (found on Page 11 of the PDF).
• Line 2: Add any tax credit recapture amounts.
• Line 4: Enter any nonrefundable LLET credits passed through from other entities via Schedule K-1.
• Line 6 (LLET Liability): Subtract credits (Lines 4 and 5) from the total. The minimum tax is $175—you cannot pay less than this amount.
• Lines 7–15 (Payments & Credits): Enter estimated payments, extension payments, and prior year credits. Calculate any penalties on Line 15.
• Line 22: If you overpaid, calculate the refund amount here.

Part III: Income Tax Computation (S-Corps & Partnerships)

• Lines 1–3: Enter specific taxes like excess net passive income tax, built-in gains tax, or LIFO recapture tax.
• Line 11 (Income Tax Due): Calculate the total income tax owed after applying payments and credits.
• Line 17: If applicable, determine the refund amount for income tax overpayment.

Part IV & V: Explanations

• Part IV: If filing a final or short-period return, check the reason (e.g., Ceased operations, Merger, Change of ownership).
• Part V: Use this space to explain any changes if you are filing an amended return.

Schedule Q: Questionnaire

• Questions 1–7: Answer all questions regarding your business status, including if you are a new business, successor to a previous one, or if you own interests in other pass-through entities.

Schedule K: Owner’s Share

• Section A: Report the total amounts of income, deductions, and credits that will be distributed to owners. This includes ordinary income (Line 1), rental income (Lines 2–3), and portfolio income like interest and dividends (Line 4).
• Section B (LLET Pass-through): Report the entity’s gross receipts and gross profits allocated to owners.

Schedule L: LLET Computation (Page 10-11)

• Section A: Calculate Kentucky gross receipts and gross profits.
• Section B: Calculate total gross receipts and profits from all sources.
• Section C & D: Use these sections to compute the LLET based on either gross receipts or gross profits if your totals exceed $3 million. If totals are $3 million or less, you owe the minimum $175.
• Section E: Compare the results and enter the lesser amount (but at least $175) on Line 1.

Signature

• Sign and Date: A member or authorized officer must sign and date the return. If a paid preparer was used, they must also sign and provide their details.