S corporations are corporations that elect to pass corporate income, losses, deductions, and credits 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 at the entity level.
To qualify for S corporation status, the corporation must meet the following requirements:
- Be a domestic corporation
- Have only allowable shareholders
- May be individuals, certain trusts, and estates and
- May not be partnerships, corporations or non-resident alien shareholders
- Have no more than 100 shareholders
- Have only 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. See the Instructions for Form 2553 (PDF) for all required information and to determine where to file the form.
|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)|
|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) and other forms referenced on the shareholder's Schedule K-1||Instructions for Schedule E (Form 1040)Supplemental Income and Loss (PDF)|
|Estimated tax||1040-ES (PDF)|