02/19/2026
🛑 Attention owners of S-Corps and Partnerships in Minnesota!
As of 1/1/26, the pass-through entity tax (PTET) in MN expired. With the state government being in session now, there are two bills (Senate File 3405 and House File 3127) in the legislature that propose extending the PTET election through 2027.
To give you some background, in 2017 there was a cap of $10,000 put on the SALT (state and local tax) deduction for those who itemize. Owners of S-Corps and Partnerships are responsible for paying tax at the individual level, so this cap of $10,000 really hurt taxpayers in high-tax states, like MN.
To help offset this, many states (including MN) created this pass-through entity tax that allowed S-Corps and Partnerships to pay the tax owed through the business (instead of at the individual level). This allowed business owners to not lose out on that great deduction because of the $10,000 cap. The state taxes paid are also a deduction against Federal income. So the PTET is a great benefit to MN business owners.
However, the $10,000 SALT cap was a temporary tax law change that expired at the end of 2025. Since MN doesn't conform to federal tax laws automatically (like some states do), the PTET was tied to the SALT cap expiration, so it also expired.
Now, at the Federal level, due to the One Big Beautiful Bill, the SALT cap has changed to a deduction of up to $40,000 (depending on income) with a minimum of $10,000. So because there is still a cap on the SALT tax, the PTET is still needed in MN!
✔️ I am asking all Minnesota owners of S-Corps and Partnerships to reach out to their elected officials to ask for these bills to get passed. There are already so many people leaving Minnesota due to high taxes, so passing this bill will help businesses stay here.
Here is a link to help you find your elected officials and their contact information:
State legislative repository for spatial information.
