How to make the Hawaii PTET election.

Hawaii’s Pass-Through Entity Taxation lets your business pay state income tax for its owners and deduct it federally, outside the SALT cap. Here’s when and how to elect for 2026, and how to pay.

Can your business elect?

Partnerships (including LLCs taxed as partnerships) and S corporations (including single-member LLCs taxed as S corporations). Publicly traded partnerships, single-member LLCs not taxed as S corporations, and LLCs taxed as C corporations cannot elect. An entity with no qualified members (individuals, trusts, or estates) cannot elect.

The election binds all qualified members (individuals, trusts, and estates, including a disregarded single-member LLC owned by an individual); they cannot opt out. Shares of corporate and pass-through members are left out of the tax and those members get no credit. The election requires the signatures of all members or of one authorized member attesting to authority. Multi-tier provisions were repealed for 2024 and later.

Rate: A flat 9% under HRS Section 235-51.5(b) for taxable years beginning after December 31, 2023, with no separate rate for capital gains. The rate is fixed in the statute and is not tied to the individual income tax brackets.

The sum of all qualified members' distributive shares and guaranteed payments of Hawaii taxable income. A net loss can be carried forward for as long as the entity keeps electing.

Available for 2026. HRS Section 235-51.5 was enacted by Act 50, SLH 2023 for taxable years beginning after December 31, 2022, and amended by Act 50, SLH 2024 and Act 58, SLH 2025; the current statute contains no end date. New to PTET? See how the election works.

Deadlines

Step	Due for 2026
1st estimated payment	April 20, 2026
2nd estimated payment	June 22, 2026
3rd estimated payment	September 21, 2026
4th estimated payment	January 20, 2027
Election, return, and tax due	April 20, 2027
Extended return and election	October 20, 2027

These dates are for a calendar-year business. Pay at least two business days early, since state payment sites slow down on deadline days.

Electing, step by step

Deadline: Form N-362E is due April 20, 2027 for calendar year 2026, or October 20, 2027 under the automatic six-month extension, which applies only if the properly estimated tax is paid by April 20, 2027.

Start with 2025 Form N-362E, from the Hawaii Department of Taxation.

Complete Part I of Form N-362E, Pass-Through Entity Tax Election: name, FEIN, address, federal form filed (1065 or 1120-S), and total number of owners.
Under 'Check the appropriate box below to indicate who signed', check either the box for signatures by each member or the box for a responsible party.
If each member signs, have every current member sign and date Part III, Member Signatures. If a responsible party signs, complete and sign Part II, Responsible Party, and skip Part III.
Complete Schedule PTE and attach it and Form N-362E to Form N-20 (partnerships) or Form N-35 (S corporations).
File electronically by April 20, 2027, or October 20, 2027 under the automatic extension if the properly estimated tax was paid by April 20, 2027. A paper filing needs a waiver on Form L-110.

2025 Form N-362E, page 1, showing the line used to make the Hawaii PTET election: Check the appropriate box below to indicate who signed. — The election: “Check the appropriate box below to indicate who signed”

Paying the tax, step by step

Required in four equal installments. For calendar year 2026 they are due April 20, 2026, June 22, 2026 (June 20 is a Saturday), September 21, 2026 (September 20 is a Sunday), and January 20, 2027, because HRS Section 231-21 moves tax due dates that fall on a weekend or legal holiday to the next business day. Underpayments are penalized under HRS Section 235-97(f), and members' own estimated payments cannot be transferred to the entity.

What you need

Nothing to set up. Hawaii Tax Online takes payments without an account.
The entity's FEIN or Hawaii tax ID for its partnership or corporate income account.
The installment amount: one quarter of the estimated 2026 PTE tax.
The business bank account routing and account numbers.

Start at Hawaii Tax Online, Hawaii's official site.

Go to Hawaii Tax Online at hitax.hawaii.gov.
Logged in: select the partnership or S corporation account, select the tax period, select Make a Payment, and select the Estimated Tax Payment type.
Without logging in: select Make a Payment. On the Payment Type screen, choose account type Partnership (for a partnership) or Corporate income (for an S corporation), and type of payment Estimated Tax Payment.
Enter the payment information and complete the payment.
Do not move a member's own individual estimated payments to the entity; DOTAX does not allow the transfer.

Filing the return: Form N-20 (partnerships) or Form N-35 (S corporations) with Form N-362E and Schedule PTE, due April 20, 2027 for calendar year 2026, or October 20, 2027 with an extension. The tax balance is due April 20, 2027. All returns and payments must be filed and made electronically, or the election is canceled unless an exemption is granted.

Keep the PTE tax separate from your personal estimates. The business pays the PTE tax from its own account under its own ID. Once it does, each owner's personal Hawaii estimates can usually drop by the credit they expect, so the same tax is not paid twice.

Claiming the credit

Each qualified member claims a nonrefundable credit equal to its share of the tax paid, using Form N-362 and Schedule CR with Form N-11 or N-15. Unused credit carries forward until used. For tax years beginning after December 31, 2024, members claiming the credit must add their share of the PTE tax back to taxable income.

Good to know

Nonresident individual members whose only Hawaii income is from electing entities that file and pay the tax do not have to file a Hawaii return, and the PTE tax satisfies the nonresident withholding requirement.
Schedule PTE cannot be amended after the due date (including extension).
Residents get a nonrefundable credit, with no carryforward, for their share of a substantially similar PTET paid to another state, claimed on Schedule CR, line 11.
The electing entity may deduct the PTE tax for Hawaii purposes.
Paying your personal Hawaii estimates? See how to pay Hawaii estimated taxes.
Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Hawaii Department of Taxation's own publications and HRS Section 235-51.5.

This guide is for general education and reflects rules as of October 2026. Tax law and agency websites change, and your situation may have details that change the answer. Please talk with your tax professional before acting on it.