What is a pass-through entity (PTE) tax election and can it save me SALT money?

Most states now offer a pass-through entity tax that lets partnerships and S-corporations pay state income tax at the business level, where it's fully deductible on the federal return, instead of passing it to owners who face the $10,000 SALT cap on their personal returns. The owners then get a credit or income exclusion on their state return, so it's largely a mechanism to convert non-deductible personal SALT into deductible business expense. It can save high earners in high-tax states thousands of dollars a year. The rules, election deadlines, and mechanics differ by state, and there can be quirks for owners who live in a different state than the business. If you own a share of a pass-through, ask your accountant whether the PTE election makes sense before the annual election deadline.