Shareholders in an S (shareholder) corporation can be individuals, or other businesses and organizations, such as corporations and trusts.
Entities that are S corporations for federal purposes are S corporations for Massachusetts purposes, with the exception of corporate trusts, security corporations and public utility corporations. Items of S corporation income, loss and deduction are passed through the S corporation to the shareholders, and reported and taxed on their individual returns.
However, S corporations are liable for the non-income measure of the corporate excise and are liable for the income measure of the corporate excise on any income that is taxable to the S corporation federally. S corporations with total receipts of $6 million or more are liable for the income measure of the corporate excise at the following rates:
- 1.83 percent on net income subject to tax if total receipts are $6 million or more, but less than $9 million; or
- 2.75 percent on net income subject to tax if total receipts are $9 million or more.
All S corporations owe a minimum corporate tax of $456 regardless of profitability.
Massachusetts S corporations must file Form 355S, with a Schedule S. S corporations must also file a Schedule SK-1 for each resident and nonresident shareholder, as well as provide a Schedule SK-1 to each shareholder to inform them of their distributive shares of items of income, loss, deduction and credit, for reporting on their Massachusetts returns. For additional information on these requirements, please refer to the Form 355S instructions.
|Filing frequency||*Return filing method|
|Annually, on the 15th day of the 3rd month after the close of the S corporations taxable year. Payment is due with return.||Form 355S, with Schedule S and Schedules SK-1||Form 1120-S|
S corporations are subject to the same estimated payment requirements detailed above for regular corporations.
The following table shows which return each type of shareholder should file:
|Type of shareholder||Form to file|
|Full-year resident individual||Form 1|
|Nonresident/part-year resident individual||Form 1-NR/PY|
|Trust or estate||Form 2|
|Domestic and foreign corporations||Form 355|
Domestic or foreign corporation (part of a MA Combined group)
|Corporate trust||Form 3F|
|Domestic and Foreign S corporations||Form 355S|
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