S Corporations
S corporations are corporations that elect to pass corporate income, losses, deductions and credit through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income.
To qualify for S corporation status, the corporation must meet the following requirements:
- Be a domestic corporation
- Have only allowable shareholders
- including individuals, certain trust, and estates and
- may not include partnerships, corporations or non-resident alien shareholders
- Have no more than 100 shareholders
- Have one class of stock
- Not be an ineligible corporation i.e. certain financial institutions, insurance companies, and domestic international sales corporations.
In order to become an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation (PDF) signed by all the shareholders.
Filing Requirements:
| If you are an S corporation then you may be liable for... | Use Form... | Separate Instructions... |
|---|---|---|
| Income Tax | 1120S (PDF) 1120S Sch. K-1 (PDF) | Instructions for Form 1120S(PDF) Instructions for Form 1120S Sch. K-1 (PDF) |
| Estimated tax | 1120-W (PDF) (corporation only) and 8109 | Instructions for Form 1120-W(PDF) |
|
940 (PDF)
8109 | |
| Excise Taxes | Refer to the Excise Tax web page |
| If you are an S corporation shareholder then you may be liable for... | Use Form... | Separate Instructions... |
|---|---|---|
| Income Tax | 1040 and Schedule E (PDF) | Instructions for Schedule E (Form 1040)Supplemental Income and Loss (PDF) |
| Estimated tax | 1040-ES (PDF) |
Page Last Reviewed or Updated: 31-Dec-2012
