The pass-through entity compliance program allows members of pass-through entities to choose how they will meet their Massachusetts tax obligations. The compliance program also requires pass-through entities to report to DOR how their members plan to comply.
The pass-through entity compliance program allows non-exempt members of pass-through entities to meet their tax obligation by:
- agreeing to file and to subject themselves to personal jurisdiction in Massachusetts;
- participating in a composite return by the pass-through entity; or
- having the pass-through entity withhold and pay tax on their behalf.
The compliance program generally exempts the following members:
- Massachusetts resident individuals
- most Massachusetts estates and trusts;
- federally tax-exempt organizations;
- corporations subject to Massachusetts taxing jurisdiction filing their returns including any distributive share from the pass-through entity;
- pass-through entities that are filing a return; and
- insurance companies.
To be treated as exempt by the pass-through entity, these members must file an exemption certificate (Form PTE-EX) with the pass-through entity.
For more details, please see Massachusett's GUIDE.