During the weekend of May 16-17, the MN House and Senate passed a resolution extending the PTE program through tax year 2027.  Due to the holiday, it was just signed into law.  Next year, the lawmakers will entertain making the program effective beyond 2027.  Now that the program is reinstated, it could pose problems. 

• Those of you who commenced MN withholding on your payroll because the PTE didn’t exist beyond 2025, may discontinue that MN withholding, as the MN income taxes may be paid via the PTE program once again. Any duplication / overpayment of the withholding taxes will be refunded when you file next year or they will be applied to 2027, depending upon your facts. 
• Even though the PTE wasn’t enacted until now for tax year 2026, the state still wants a full year’s worth of PTE taxes paid timely. As a courtesy, they will NOT charge underpayment interest for not making a Q1 payment, because the program didn’t exist, provided the taxpayers pay Q1 & Q2 amounts by 6/15/26.  If 2026 income will be at least what 2025 was, then the amount to pay by 6/15 is 50% of your 2025 PTE liability.  Then pay 25% by 9/15 and the remaining 25% by 12/31, so we can deduct the payment in 2026 vs 2027.  If 2026 income will be less than 2025, then you may reduce your PTE payments to account for this.    Multiply net income by 10% to ballpark your 2026 PTE liability.  For S-Corp filings, the 2025 PTE liability may be found on Form M8 Line 16.  For LLC/ partnership filings, the 2025 PTE liability may be found on Form M3 Line 5.  Please review your filings to obtain your 2025 PTE liability.  For those still under extension for 2025, contact me for the amounts to pay by 6/15, if your returns are not final by then. 
• Issues 1 & 2 above are likely going to cause a cash issue for many, as the passing of the bill is so late in the year and it is retroactive back to 1/1/26. If underpayment penalties exist upon filing, then we’ll do what we can to reduce or remove them.