Many thought the pass-through entity (PTE) tax election might be eliminated—especially for professional service firms. Yet the deduction survived. For high-income S corps and partnerships, that’s a big win, especially when paired with the higher SALT cap.

What this means for planning:
● PTE elections remain valuable for owners in higher brackets.
● State-by-state differences complicate application—uniformity is still elusive.
● Colorado CPAs must weigh QBI add-backs when evaluating elections.

Bottom line: the PTE election remains a vital tool, but not a one-size-fits-all solution. Practitioners should revisit it annually as state conformity and client circumstances evolve.

These takeaways come from COCPA's OB3 Individual and Estate Think Tank, where CPAs examined the continuing role of the PTE election under the new law.  Learn more about the OB3 and what the COCPA is doing to support our members who are breaking it down and working through it.