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 that are financial institutions are not subject to the non-income measure of the corporate excise.
S corporations with total receipts of $6 million or more are liable for the income measure of the corporate excise at the following rates:
- 1.93% on net income subject to tax if total receipts are $6 million or more, but less than $9 million; or
- 2.9% on net income subject to tax if total receipts are $9 million or more.
Financial institutions that are S corporations with total receipts of $6 million or more are taxed as a financial institution S corporations under MGL ch 63, § 2B at the following rates:
- 2.6% on net income subject to tax if total receipts are $6 million or more, but less than $9 million; or
- 3.9% 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, Form 63 FI or 355U 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 that have total revenues of $100,000 or more must file electronically. In addition, an S corporation must file electronically unless all of its shareholders are resident individuals. An S corporation must also file electronically if it is withholding on a shareholder’s distributive share or if it received distributive share upon which a lower-tier entity has paid withholding or estimated taxes. For more information about the E-File mandates, see TIR 16-9.
S corps that are members of a combined group may file on the 15th day of the fourth month. However,
- an S corp that is member of a combined group with a different taxable year must file its non-income measure return before the 15th day of the third month following the close of the S corp’s taxable year; and
- the informational return of an S corporation, Form 355S or Form 63 FI, including Schedules S and SK-1, remain due on or before the 15th day of the third month following the close of an S corporation’s taxable year.
This is true regardless of whether the S corp is subject to the corporate excise or the financial institutions excise. See 830 CMR 62C.11.1 for more information
S corporations are subject to the same estimated payment requirements as 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|
|Financial institutions that are S corporations||Form 63FI|