In February, we published an alert regarding Indiana’s fast-tracked enactment of a pass through entity tax (PTET). Since the new law impacts filings this year, the Indiana Department of Revenue (DOR) immediately commenced work to implement these changes. The DOR has created a website specifically for PTET, which includes updated instructions for making the PTET elections, and FAQs. Here is a statement from the DOR:
 

Due to the enactment of P.L. 1-2023 in February 2023, DOR is unable to adjust pre-existing forms issued for the 2022 tax year. To add additional lines or fields to a return requires several weeks or months of design, programming, and testing, both with external software developers and with DOR systems. That stated, DOR is adjusting to fit PTET within its previously issued 2022 returns to permit PTET to be reported within the constraints of external software and internal DOR systems. Thus, with the sole exception of the Form IN-PTET, DOR will not be issuing any new forms or schedules nor revising any previously published forms or schedules for the 2022 tax year. Please see DOR’s instructions and FAQs for further information on reporting PTET on 2022 returns.

For the 2023 tax year, DOR will revise its forms and schedules to reflect PTET in the same manner as other regular form changes. The 2023 tax year forms will be issued no later than the fall of 2023, in the normal manner that other form revisions are published.

The PTET is a tremendous development for Hoosier business owners, and the Legislature has tried to maximize the benefit by putting the PTET in place for the immediate filing season, which has created challenges, particularly for the DOR. Hoosier business owners should know that DOR employees have worked hard to make this happen as efficiently as possible for taxpayers under these circumstances, and they should be commended for their efforts. We will continue to work with the DOR to address any additional questions as they arise. 

If you have questions regarding the PTET, please contact Mark Richards, Matt Ehinger, Josh Schlake, or any member of the Ice Miller Tax Group. 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.