Senate Enrolled Act 2: Taxation of Pass-Through Entities (SEA 2) enacting a pass-through entity tax for Indiana has been signed into law by Gov. Holcomb
with a retroactive date of Jan. 1, 2022. The bill was fast tracked through the Statehouse to allow CPAs, already midway into tax season, as much time as possible to assist clients during tax season, while allowing taxpayers the greatest opportunity
to benefit from the work around.
The INCPAS advocacy team worked with elected officials and multiple stakeholders to ensure clear guidance and a timely implementation.
A few items of note on PTET:
See below for additional information and resources — we will be updating this page regularly.
- There are 29 states (and 1 locality) that have enacted a PTE tax — all of which are effective in 2022 or earlier.
- There is a strong desire among the Indiana business community and legislature to enact with a retroactive effective date of Jan. 1, 2022.
- The election is optional, unlike CT where the election is mandated.
- There are Safe Harbor provisions that waive penalties during the initial implementation.