How to make the Massachusetts PTET election.

Can your business elect?

S corporations, partnerships (excluding publicly traded partnerships), LLCs taxed as either, and trusts with income taxed to beneficiaries can elect. Sole proprietorships, disregarded single-member LLCs, and grantor trusts cannot. Out-of-state entities can elect.

Each election binds all qualified members for the year, and members cannot opt out. Qualified members are individuals, estates, and trusts subject to Massachusetts personal income tax, resident or nonresident. Corporate and partnership members are excluded from the base. Under the Chapter 63E excise, only members whose share exceeds the surtax threshold count.

Rate: Chapter 63D: 5% of qualified members' income. Chapter 63E: 4% of each qualified member's share above the 2026 surtax threshold of $1,107,750. An entity can elect both, so income above the threshold bears both excises.

Chapter 63D: each qualified member's distributive share subject to Massachusetts personal income tax (residents' full share, nonresidents' share apportioned to Massachusetts), including guaranteed payments. Chapter 63E: the part of each qualified member's share that exceeds the surtax threshold.

Available for 2026. The original 5% Chapter 63D excise (in effect since 2021) continues because the federal SALT cap remains in effect. St. 2026, c. 101 (approved June 12, 2026) added a second, 4% Chapter 63E excise for tax years beginning on or after January 1, 2026. Both expire if the federal SALT cap expires or is repealed. 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: Elections are made on the entity's timely filed 2026 return (Form 3, Form 355S, or Form 2) and confirmed by filing Form 63-ELT by the return due date, including valid extensions. DOR treats an election as valid if the return is filed within 6 months of the original due date (September 15, 2027 for a calendar-year partnership or S corporation).

Start with 2025 Form 3, Partnership Return of Income, from the Massachusetts Department of Revenue.

1. Register the entity for the 63 Entity Level Tax account in MassTaxConnect: log in, select More, go to the Access panel, choose Add an Account, and select 63 Entity Level Tax.
2. Make the election on the entity's timely filed original 2026 return: Form 3 (partnerships), Form 355S (S corporations, on line 23 of Schedule S), or Form 2 (trusts). On the 2025 Form 3 this is Item N, 'Annual Voluntary Election.'
3. Choose the Chapter 63D excise, the Chapter 63E excise, or both. Each election binds all qualified members for 2026 and cannot be made on an amended return.
4. After the return is filed, file Form 63-ELT electronically through MassTaxConnect or third-party software by the return's due date, including a valid extension.

Paying the tax, step by step

Required if the annual payment is $400 or more. For a calendar-year entity, payments are due April 15, June 15, and September 15, 2026, and January 15, 2027. The required payment is the lesser of 80% of the current-year excise or 100% of the prior-year excise. For 2026, the first- and second-quarter underpayment penalty is waived if the entity elects the Chapter 63E excise.

What you need

• An account with MassTaxConnect for the business. Set it up before the first deadline.
• A MassTaxConnect login for the entity's existing Corporate, Partnership, Fiduciary, or Financial Institution Excise registration.
• The 63 Entity Level Tax account added in MassTaxConnect.
• The bank account routing and account numbers.
• The amount of the payment allocated to each excise, if both are elected.

Start at MassTaxConnect, Massachusetts's official site.

1. Log in to MassTaxConnect. The entity must already be registered for the 63 Entity Level Tax account; do not pay on another tax type.
2. On the Summary tab, find the 63 Entity Level Tax panel and select Make a Payment.
3. Choose the payment type from the drop-down menu (for example, an estimated, extension, or return payment).
4. Enter the amount and, if both excises are elected, the breakdown between the Chapter 63D and Chapter 63E excise. One payment covers both.
5. Submit the payment. The excises must be paid electronically; there is no mailed voucher option.

Filing the return: Form 63-ELT, filed electronically. Due March 15, 2027 for a calendar-year partnership (Form 3) or S corporation (Form 355S), and April 15, 2027 for a trust (Form 2). The excise is due on the original due date even if the return is extended.

Claiming the credit

Each qualified member gets a refundable credit equal to 90% of their share of each excise actually paid, as reported on the Massachusetts Schedule K-1. The credit is claimed for the year in which the entity's tax year ends, on an electronically filed return.

Good to know

• The member credit is 90% of the excise paid, so 10% of the excise is not recovered on the member's return.
• The Chapter 63E credit cannot be claimed on a nonresident composite return. Nonresidents above the surtax threshold must file Form 1-NR/PY to claim it.
• Net capital losses cannot offset other income in computing either excise, and excise-level losses do not carry forward.
• A member's own estimated tax payments cannot be applied to the entity's excise. PTE estimated payments reduce members' required estimates and PTE withholding.
• If the entity makes estimated payments but does not elect, it can request a refund through MassTaxConnect after filing its return.
• Paying your personal Massachusetts estimates? See how to pay Massachusetts estimated taxes.
• Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Massachusetts Department of Revenue's own publications and M.G.L. c. 63D and c. 63E.

• Mass. DOR: Elective Pass-through Entity Excise FAQ (updated July 31, 2026)
• Acts of 2026, Chapter 101, Section 21 (new Chapter 63E) and Section 45 (effective date)
• Mass. DOR Working Draft TIR: Tax Provisions in the FY2026 Final Mid-Year Supplemental Appropriation Bill (June 23, 2026)
• M.G.L. c. 63E Section 2 (rate and credit)
• M.G.L. c. 63E Section 4 (payment and return due date)
• 2025 Form 3 Partnership Return of Income (Item N election)
• MassTaxConnect

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.