Lawmakers approved Connecticut's pass-through entity tax at the end of the 2018 General Assembly session in an attempt to mitigate the loss of federal state and local tax deductions for small businesses.

The new tax is designed specifically to ease the burden on owners and partners of pass-through entity businesses—partnerships, S corporations, and LLCs treated as partnerships—by enabling them to circumvent the new $10,000 annual cap on state and local tax deductions.

(The PET is not applicable to sole proprietorships, SMLLCs, publicly traded partnerships, or C corporations.)

CBIA's July 24 Navigating the New Pass-Through Entity Tax workshop featured four Connecticut tax experts: Shipman & Goodwin associate David Bigger; Connecticut Department of Revenue Services counsel Matt Dayton; Shipman & Goodwin partner Alan Lieberman; and BlumShapiro partner Tony Switajewski.

CBIA PowerPoint 072418