Although mandated pass-through entity state tax payments on behalf of nonresidents are called "withholding", these payments are often made in one lump sum well after the close of the tax year.

Withholding payments reported on forms W-2 and 1099 are treated as having been made in the tax year to which they are credited regardless of when the payer actually remits the withholding to the applicable taxing authority. One consequence of this is that taxpayers are able to claim a state tax deduction on his/her federal return for taxes that were in fact paid to a state well after the close of the year.

My question is, should we treat PTE state tax withholding in the same manner, deducting on the return for the year to which it is credited regardless of the year when it was paid?

My experience has been that a K-1 often does not specify when state withholding taxes were actually paid. If the idea behind the W-2 withholding treatment is one of administrative convenience, then it may apply here as well. However, if the typical treatment of withholding has to do with the timing of when the taxpayer constructively receives the funds from which the taxes are withheld, then it may not apply.

In the case that PTE state tax "withholding" should not in fact be treated like other withholding, how safe is it to assume that the taxes were paid during the taxable year when preparing a return based on a K-1 that does not specify the year the withheld taxes were paid to the state taxing authority?