Shareholders in an S corporation can be:
- 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.
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:
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.
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|