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S Corporations

Learn about the tax requirements for S corporations.

Overview

Shareholders in an S corporation can be:

  • Individuals
  • 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 security corporations.

An S corporation's income, losses, and deductions are passed through to the shareholders, and are reported and taxed on the shareholders' individual returns. 

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 % on net income subject to tax if total receipts are $6 million or more, but less than $9 million; or
  • 2.75% 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.

Filing requirements

Massachusetts S corporations must file a Form 355S with a Schedule S.

S corporations must also:

  • Massachusetts Schedule SK-1 for each resident and nonresident shareholder
  • Provide a Schedule SK-1 to each shareholder to inform them of their distributive shares of: 
    • Income
    • Loss
    • Deductions
    • Credit

For more information on these requirements, please refer to the Form 355S instructions.

Returns are due annually, by 15th day of the third month after the close of the S corporation's taxable year. Payment is due with the return.

Refer to Technical Information Release (TIR) 04-30 for detailed information about filing requirements. You may be required to file electronically. See TIR 16-9 for more information.

S corporations are subject to the same estimated payment requirements as 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) Form 355C
Corporate trust Form 3F
Domestic and Foreign S corporations Form 355S

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