SSTB (Doctor, Lawyer, CPA, Consultant) Using PTET to Restore QBI: 2026 $40,000 SALT Cap vs. State PTET Election Calculator

For a SSTB (Doctor, Lawyer, CPA, Consultant) Using PTET to Restore QBI filing IRS Form 1120S with $380,000 in pass-through income and $420,000 in household MAGI, electing state Pass-Through Entity Tax (PTET) under IRS Notice 2020-75 converts nondeductible personal SALT into a 100% deductible IRC § 162 business expense, bypassing both the $40,000 SALT cap and the 30% MAGI phase-out between $500,000 and $600,000.

Open SSTB (Doctor, Lawyer, CPA, Consultant) Using PTET to Restore QBI 2026 PTET Calculator

Why SSTB (Doctor, Lawyer, CPA, Consultant) Using PTET to Restore QBI Owners Still Need State PTET in 2026

• Escapes the $500k-$600k MAGI SALT Torpedo: Under Public Law 119-21 (§ 70120), the $40,000 SALT cap phases down by 30% above $500,000 MAGI back to $10,000 at $600,000 MAGI. Entity PTET has zero dollar cap and zero MAGI phase-out.
• Preserves the $32,200 MFJ Standard Deduction: Deducting state income taxes on Form 1120S Line 12/14 allows owners to claim the full $32,200 MFJ standard deduction (or dedicate their personal SALT cap exclusively to home property taxes).
• Reduces Self-Employment Tax (Form 1065) & AGI: For active general partners / LLC members, an entity-level Form 1065 PTET deduction reduces ordinary business income before Self-Employment tax and lowers AGI for Section 199A QBI thresholds.