This change improves transparency and should equip CPAs and other tax advisors with the necessary information to: Evaluate the validity of the deficiency. Prepare a timely and informed response. Advise clients on whether to dispute or comply with the notice. Practice Insight: This provision aligns with best practices in tax administration and supports more efficient resolution of disputes. STRATEGIC IMPLICATIONS FOR CPA FIRMS The PTET framework now offers a clean and efficient way to reduce federal taxable income for high-net-worth clients and closely held businesses. CPAs should evaluate: Eligibility: Confirm entity type and ownership structure. Timing: Coordinate PTET payments with year-end planning. Documentation: Maintain records of elections, payments, and owner allocations. Client Communication: Educate clients on the benefits and mechanics of PTET elections, especially retroactive options. ACTION STEPS FOR CPAs 1. Review client rosters. Identify partnerships and S corps with significant Nebraska income from 2018-2022. 2. Model tax impact. Estimate federal savings from PTET deductions and Nebraska credits. 3. Monitor NDOR guidance. Stay current on form updates and procedural clarifications. FINAL THOUGHTS Nebraska’s PTET law is now more accessible, transparent, and strategically valuable. CPAs are well-positioned to guide clients through elections, optimize deductions, and respond effectively to any state-level notices. With retroactive flexibility and simplified compliance, the law is a powerful tool for tax planning in 2025 and beyond. Jeff Schaffart and Nick Bjornson, attorneys at Koley Jessen, regularly advise businesses on federal and state tax matters. They were instrumental in the passage and subsequent refinement of Nebraska’s PTET law, drafting and submitting proposed legislation that state senators ultimately used in LB647, collaborating with the Omaha and Nebraska Chambers of Commerce, and testifying in front of the Unicameral’s Revenue Committee to ensure the PTET process is more user-friendly and the deficiency notice process more transparent and fair for Nebraska taxpayers. For further details about Nebraska’s PTET law or to get in touch, email jeff.schaffart@koleyjessen.com and nicholas.bjornson@koleyjessen.com, respectively. 15 nescpa.org
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