How to make the Oklahoma PTET election.

Oklahoma’s Pass-Through Entity Tax Equity Act of 2019 (electing pass-through entity) 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?

Any entity required to file an Oklahoma partnership return (Form 514) or Oklahoma S corporation return (Form 512-S). Each entity makes its own election, which is not binding on any other entity.

The tax is computed member by member on each member's Oklahoma distributive share, with the rate depending on the member's type. The election overrides any composite return election and the S corporation's obligation to pay tax for nonresident shareholders.

Rate: 4.5% on the shares of individual, trust, and estate members (the statute uses the top individual rate, which House Bill 2764 set at 4.5% for 2026), and 4% on the shares of C corporation, pass-through entity, and financial institution members. The 2026 Form OW-8-ESPTE uses these two rates.

Each member's share of the entity's Oklahoma net entity income (income allocated and apportioned to Oklahoma), computed on Form 587-PTE.

Available for 2026. The Pass-Through Entity Tax Equity Act of 2019 (68 O.S. Sections 2355.1P-1 to 2355.1P-4) has no sunset in the current text, and the Tax Commission has published 2026 estimated payment forms for electing entities. New to PTET? See how the election works.

Deadlines

Step	Due for 2026
Stand-alone Form 586	March 15, 2026
1st estimated payment	April 15, 2026
2nd estimated payment	June 15, 2026
3rd estimated payment	September 15, 2026
4th estimated payment	January 15, 2027
Return and balance due	April 14, 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: An election already in effect continues for 2026 unless revoked. A new election could be made on a stand-alone Form 586 during 2025 or within the first two months and 15 days of 2026 (by about March 15, 2026), or on the timely filed 2026 Form 514 or 512-S, by its due date including extensions.

Start with Form 586, Pass-through Entity Election Form (revised 2025), from the Oklahoma Tax Commission.

If an election is already in effect, it continues for 2026. Mark box (4), 'Electing PTE,' at the top of page 1 of Form 514 or Form 512-S.
For a new election on the 2026 return, mark box (5), 'First-year PTE Election,' at the top of page 1 of Form 514 or Form 512-S.
Complete Form 586, Part 1, 'Pass-through Entity Making the Election,' entering 2026 as the effective tax year. An authorized partner, member, or corporate officer signs it, and it is included with the return.
Compute the tax on Form 587-PTE, Pass-Through Entity Income Tax Supplement, and file by the due date, including extensions.
Give owners a copy of the OTC acknowledgment letter. In the first year of an election made on the return, owners attach the signed Form 586 to their own Oklahoma returns.

Form 586, Pass-through Entity Election Form (revised 2025), page 1, showing the line used to make the Oklahoma PTET election: making the election to become an electing PTE. — The election: “making the election to become an electing PTE”

Paying the tax, step by step

Required if annual liability is $500 or more, paid on Form OW-8-ESPTE or through OkTAP by April 15, June 15, and September 15, 2026, and January 15, 2027 (weekend or holiday dates move to the next business day). Underpayment interest of 20% a year applies unless timely payments are at least 70% of the 2026 tax or 100% of the 2025 tax, and no interest is charged if the tax shown is under $1,000.

What you need

Access to OkTAP.
The entity's FEIN.
Bank account details or a card for the payment.
An OkTAP username and password, if paying from the entity's account.

Start at OkTAP, Oklahoma's official site.

Go to OkTAP at oktap.tax.ok.gov and click Make a Payment, or log in to the entity's OkTAP account.
Apply the payment to the entity's income tax account as a 2026 estimated payment, or as a return or extension payment for the balance.
Keep the confirmation number. Some electronic payment methods charge a convenience fee.
Pay at least 90% of the tax by April 14, 2027 if filing Form 504-PTE for an extension.
To pay estimates by mail, use the Form OW-8-ESPTE coupon. Do not mail the coupon for a payment made electronically.

Filing the return: Form 514 (partnerships) or Form 512-S (S corporations) with Form 587-PTE, due 30 days after the federal due date (April 14, 2027 for a calendar-year entity). Form 504-PTE extends the filing date up to six months, but 90% of the tax must be paid by the original due date to avoid a 5% penalty.

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

Claiming the credit

Members exclude the Oklahoma income (or loss) covered by the election on their Oklahoma return, with a schedule listing the electing entity, its FEIN, and the income covered, plus a copy of the Commission's acknowledgment letter (or Form 586 in the first year of an election made on the return).

Good to know

The 2025 Form 514 instructions have an electing partnership enter its members' shares of Oklahoma credits on its own return, against the electing PTE tax.
If the entity fails to pay the tax when due, the Commission may revoke the election back to the first unpaid year.
A net entity loss can be carried back and forward by the electing entity.
Electing entities are not required to withhold Oklahoma tax on distributions to nonresident members, and a nonresident individual whose only Oklahoma income comes from electing entities does not have to file an Oklahoma return.
House Bill 2764 also allows further 0.25% cuts to individual rates when revenue triggers are certified, which would change the rate on individual members' shares in a later year. No triggered cut applies to 2026.
Paying your personal Oklahoma estimates? See how to pay Oklahoma estimated taxes.
Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Oklahoma Tax Commission's own publications and 68 O.S. Sections 2355.1P-1 to 2355.1P-4.

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.