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Utah pass-through entity (PTE) tax election
An S Corp or partnership can elect to pay Utah's 4.45% income tax at the entity level. The entity deducts it federally, outside the owner's SALT cap, and each owner gets a matching Utah credit. This shows whether that saves you federal tax under the 2026 SALT rules.
$
Ordinary income plus separately stated items taxed by Utah.
%
$
The SALT cap shrinks 30 cents per dollar above $505,000.
$
Property tax on your home, vehicle fees, other state income tax.
$
Mortgage interest and charitable gifts.
The election likely saves federal tax.
Estimated federal savings of $1,130 on your share, or 8.5% of the $13,350 the entity would pay for you. Your Utah tax is the same either way: the entity pays it and you take a matching credit.
Deductions, 2026
| No election | With election | |
|---|---|---|
| Your share of entity income | $300,000 | $286,650 |
| Utah tax on that income (4.45%) | $13,350 you pay | $13,350 entity pays |
| Your SALT cap | $40,400 | $40,400 |
| SALT you deduct personally | $19,350 | $6,000 |
| Itemized deductions | $39,350 | $26,000 |
| Standard deduction | $32,200 | $32,200 |
| Deduction you take | $39,350 | $32,200 (std) |
| QBI deduction | $60,000 | $57,330 |
Rules
- The SALT cap is $40,400 for 2026 ($20,200 married filing separately), reduced by 30% of MAGI over $505,000, never below $10,000.
- The election is made by the entity on Form TC-75 by the last day of its tax year, and payment is irrevocable. Plan payments with your quarterly estimates.
- Owners add the tax back to Utah income and claim a nonrefundable credit for it (TC-40A codes 67 and AP). Unused credit carries forward up to ten years.
- Federal savings use your marginal bracket. Partners with self-employment income may save a bit more; that is not modeled here.
- This is an estimate, not advice for your return. S Corp calculator