PTETaxDesk / 2026 State PTET & $40k SALT Guides / Colorado (CO) 2026 PTET Election vs. $40,000 SALT Cap Calculator & Deadlines
Colorado (CO) 2026 PTET Election vs. $40,000 SALT Cap Calculator & Deadlines
How does Colorado PTET work with the $40,000 SALT cap in 2026?
For the 2026 tax year in Colorado (CO), S-Corporations and Partnerships can evaluate 4.4% Colorado SALT Parity Act (DR 0106) (100% Refundable Credit, deadline: Return Due Date) against the new $40,000 individual Schedule A SALT deduction cap (which phases down by 30% between $500,000 and $600,000 MAGI under Public Law 119-21 § 70120).
For the 2026 tax year in Colorado (CO), S-Corporations and Partnerships can evaluate 4.4% Colorado SALT Parity Act (DR 0106) (100% Refundable Credit, deadline: Return Due Date) against the new $40,000 individual Schedule A SALT deduction cap (which phases down by 30% between $500,000 and $600,000 MAGI under Public Law 119-21 § 70120).
Open Colorado 2026 PTET vs. $40k SALT Calculator
2026 Colorado (CO) Pass-Through Entity Tax (PTET) Statutory Matrix
| PTET Parameter | 2026 Colorado (CO) Rule |
|---|---|
| State PTET Rate & Statute | 4.4% Colorado SALT Parity Act (DR 0106) |
| Owner Credit / Exclusion Mechanism | 100% Refundable Credit |
| Mandatory Election / Payment Deadline | Return Due Date |
| 2026 Federal Individual SALT Cap | $40,000 (Phases down to $10,000 between $500k & $600k MAGI) |
| IRS Notice 2020-75 Entity Deduction | 100% Above-the-Line Deduction on Form 1065 / Form 1120-S |
Frequently Asked Questions
Should I elect Colorado PTET in 2026 now that the federal SALT cap is $40,000?
Yes, in most cases where Colorado state income tax plus personal property tax exceeds $40,000, where household MAGI exceeds $500,000 (triggering the 30% SALT phase-down torpedo), or where taking the $32,200 MFJ standard deduction while deducting Colorado PTET at the entity level produces a larger combined federal deduction.
What is the 2026 Colorado PTET election deadline?
In Colorado, the statutory election / payment rule is: Return Due Date. Cash-basis entities must remit PTET payments by December 31, 2026 to claim the federal deduction on the 2026 return.