PTETaxDesk / 2026 State PTET & $40k SALT Guides / California June 15 PTET Prepayment Trap (Form 3893): Why Missing 50% Kills Your 2026 Election
California June 15 PTET Prepayment Trap (Form 3893): Why Missing 50% Kills Your 2026 Election
California June 15 PTET Prepayment Trap (Form 3893)?
Under California R&TC § 19904, an S-Corporation or Partnership cannot make a valid 2026 California 9.3% PTET election unless it pays the greater of $1,000 or 50% of its prior-year PTET liability on or before June 15, 2026 using FTB Form 3893 (or Web Pay). Missing the June 15 deadline by even one day or one dollar disqualifies the entity from PTET for the entire 2026 tax year.
Under California R&TC § 19904, an S-Corporation or Partnership cannot make a valid 2026 California 9.3% PTET election unless it pays the greater of $1,000 or 50% of its prior-year PTET liability on or before June 15, 2026 using FTB Form 3893 (or Web Pay). Missing the June 15 deadline by even one day or one dollar disqualifies the entity from PTET for the entire 2026 tax year.
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2026 PTET & SALT Compliance Checklist
- Adopt a Written Partner/Shareholder PTET Consent Resolution: Keep signed authorization in your corporate or partnership minute book.
- Remit Cash-Basis Vouchers Before December 31, 2026: Under IRS Notice 2020-75, cash-basis entities can deduct 2026 PTET only to the extent paid by December 31, 2026.
- Avoid Overpayment Refunds (IRC § 111): Base your Q4 PTET payment on actual projected 2026 state liability so next year's state refund isn't recaptured as ordinary federal income.
Frequently Asked Questions
California June 15 PTET Prepayment Trap (Form 3893)?
Under California R&TC § 19904, an S-Corporation or Partnership cannot make a valid 2026 California 9.3% PTET election unless it pays the greater of $1,000 or 50% of its prior-year PTET liability on or before June 15, 2026 using FTB Form 3893 (or Web Pay). Missing the June 15 deadline by even one day or one dollar disqualifies the entity from PTET for the entire 2026 tax year.