The [ENTITY NAME] will be making an election to pay the California passthrough entity tax on behalf of its non-business entity owners. Please circle below whether you will be opting in or out of having the entity pay the tax on your behalf for the [YEAR] tax year. If we do not receive this form back by [MONTH DAY, YEAR], [ENTITY NAME] will not pay the tax on your behalf. Once the election is made it cannot be revoked or modified.

Although [ENTITY NAME] is making the election, you may choose to opt out of having [ENTITY NAME] pay the tax on your behalf.

I, [OWNER’S NAME] opt-in/opt-out (please circle one) of having the [ENTITY NAME] pay a passthrough entity tax on my distributive/pro rata share of income from [ENTITY NAME] that is subject to California taxation.

I understand the election is for the [YEAR] tax year only and once made cannot be revoked. Opting in for the [YEAR] tax year does not commit me to opting in in future tax years. A new consent must be provided each tax year.

I understand that in signing this consent that the entity will claim a full deduction for the amount of tax paid on the federal return that will be passed through to me on the K-1. This amount will be added back to net income on my California K-1.

I also understand that I may claim a California tax credit for the amount of the elective pass-through entity tax paid on my distributive/pro rata share of income as reported to me on my K-1. I understand that this credit is nonrefundable and any excess unused credit may be carried forward for five years. Any credit unused after five years is lost.

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