How to make the Indiana PTET election.

Can your business elect?

Entities treated as partnerships or S corporations for federal tax purposes, including LLCs taxed as either. C corporations (including nonprofits), qualified subchapter S subsidiaries, disregarded single-member LLCs, entities that elect C corporation treatment, estates, and trusts cannot elect.

The election binds all eligible owners; an entity cannot elect for only some owners and an owner cannot choose different treatment. Ineligible owners include certain exempt banks and financial institutions, international banking facilities, and (for 2025 and later) employee stock ownership plans, tax-exempt retirement plans whose income is not unrelated business income, and governmental entities. In tiered structures, an upper-tier entity applies PTET passed through from a lower-tier entity against its own PTET, then against nonresident withholding, with any balance refunded.

Rate: 2.95% for 2026, the Indiana individual adjusted gross income tax rate in effect on the last day of the tax year (the Department lists 2.90% for 2027).

Nonresident owners are taxed on their Indiana-apportioned share. For resident owners, the entity chooses either pre-apportionment (the full share, including non-Indiana income) or post-apportionment, and must use the same method for all residents; that designation is irrevocable once made on the return.

Available for 2026. Indiana's pass through entity tax was enacted by Senate Enrolled Act 2 (2023) at IC 6-3-2.1, retroactive to tax years beginning in 2022, and Department of Revenue guidance lists PTET rates for 2026 and 2027. New to PTET? See how the election works.

Deadlines

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: For 2026, the election can be made any time during the tax year and no later than the earlier of the return due date (including extensions) or the date the original return is filed. An election cannot be made on an amended return.

Start with Form IN-PTET, Pass Through Entity Tax Election (State Form 57223), from the Indiana Department of Revenue.

1. Choose one of two methods, both available any time before the original 2026 return is filed (and no later than its due date with extensions).
2. Method 1: complete Form IN-PTET (State Form 57223) with the entity name, FEIN, entity type, and the 2026 start and end dates, and have a person authorized to bind the entity sign the attestation. Submit it through INTIME or by mail to Indiana Department of Revenue, P.O. Box 7119, Indianapolis, IN 46207-7119, and keep a signed copy.
3. Method 2: on page 1 of the original Form IT-65 or IT-20S, check the 'PTET Return' box.
4. On Schedule PTET, enter a computation code 01 through 06 (or 13 through 15 if credits are claimed), which also designates pre-apportionment or post-apportionment treatment for resident owners. Missing the box or the code makes the election invalid.
5. File the original return. The election cannot be made on an amended return, is made separately each year, and cannot be revoked.

1

Paying the tax, step by step

Estimated PTET payments follow the corporate schedule: the 20th day of April, June, September, and December, moved to the next business day when the date falls on a weekend or holiday. For a calendar-year 2026 entity that means April 20, June 22, September 21, and December 21, 2026, paid with Form IT-6WTH or through INTIME. No penalty applies to an installment of at least 20% of current-year PTET or 25% of prior-year PTET, and the Department assesses any penalty itself after the return is filed.

What you need

• Access to INTIME (Indiana Taxpayer Information Management Engine).
• The business's FEIN and INTIME login (with access beyond View Only).
• The 2026 taxable year and the installment amount.
• The business bank account routing and account numbers, or a credit card.

Start at INTIME (Indiana Taxpayer Information Management Engine), Indiana's official site.

1. Log in to the business's INTIME account at intime.dor.in.gov.
2. Open the business's corporate income tax account, where PTET payments are made with Form IT-6WTH.
3. From the Summary page Periods tab (or All Actions, then Manage Payments & Returns), select Make Payment for the 2026 taxable year. Selecting the correct taxable year is required.
4. Choose bank payment (no fee) or credit card (fee), enter the amount, and submit.
5. To pay by mail, send the payment with a Form IT-6WTH voucher marked for the 2026 taxable year.

Filing the return: Form IT-20S (S corporations) or Form IT-65 (partnerships) with Schedule PTET. Any PTET balance is due April 15, 2027 for a calendar-year 2026 entity. A federal extension extends the Indiana filing date, but penalty relief requires paying 90% of the expected combined PTET and composite tax (or meeting the 80% current-year or 100% prior-year safe harbor) by April 15, 2027.

Claiming the credit

Owners receive a refundable credit equal to the PTET paid on their share, reported on a separate PTET line of Schedule IN K-1. Individuals claim it on the PTET line of Form IT-40 or IT-40PNR and must include the Schedule IN K-1 or the credit is denied.

Good to know

• PTET does not replace county income tax: county composite tax for nonresidents is still due, and PTET does not reduce local income tax.
• PTET reduces state composite withholding for nonresident owners dollar for dollar; a corporate owner still owes composite tax at 4.9% to the extent it exceeds PTET.
• Owners who deduct PTET federally must add it back to Indiana adjusted gross income in the year of the federal deduction.
• The electing entity may elect to reduce PTET by a credit for resident owners' taxes paid to other states, by a credit for owners in reverse-credit states (Arizona, Oregon, D.C.), and by Indiana credits that would otherwise flow through to owners.
• Starting in 2026, Indiana uses revised rules for computing PTET income, including limits on passive and capital losses and Section 179 deductions.
• Paying your personal Indiana estimates? See how to pay Indiana estimated taxes.
• Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Indiana Department of Revenue's own publications and IC 6-3-2.1.

• Indiana DOR Income Tax Information Bulletin #72B, Pass Through Entity Tax (July 2025)
• Indiana DOR Pass Through Entity Tax FAQ
• Indiana DOR Pass Through Entity Tax page
• Indiana DOR Rates, Fees and Penalties (2.95% individual rate for 2026)
• Form IN-PTET, Pass Through Entity Tax Election
• 2025 Form IT-65, Indiana Partnership Return (PTET Return box)
• 2025 IT-65 Partnership Return Booklet (Schedule PTET codes, extended due date)
• Indiana DOR, INTIME Guide for Business Tax Customers

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.