Calendar-year end passthrough entities should pay any remaining tax by December 31, 2023. According to IRS Notice 2020-75, the tax must be paid to claim a current tax deduction. The tax payments reduce the taxable income passed through to the owners.
The Pass-through Entity (PTE) tax is an entity-level income tax that partnerships and S corporations can elect to pay for tax years ending on or after December 31, 2021, and beginning prior to January 1, 2026. The Illinois PTE tax rate is equal to 4.95% of the taxpayer's net income for the taxable year.
A partnership or S corporation making the election is liable for paying the PTE tax. If the partnership or S corporation does not pay the full amount of PTE tax, the partners or shareholders will receive credit for the PTE tax credit paid but will be liable to pay any remaining tax (including penalties and interest) based on their share of the entity's income and credits.