An S corporation is a business that elects to pass income, losses, deductions, and credits through to its shareholders for federal tax purposes. The S corporation generally doesn’t pay income tax. Instead, the income passes through to the shareholders, who report it on their individual tax returns.

To be treated as an S corporation, a business must file Form 2553, Election by a Small Business Corporation. This election must be submitted by the 15th day of the third month of the first tax year.

There are situations where an S corporation is subject to an entity or corporate-level tax. S corporations file an information return, Form 1120-S, and provide each shareholder with a Schedule K-1 showing their share of income, deductions, and credit.

For more information on the S corporation structure and how to file, visit IRS.gov and type in “S corporations” in the search box. Also, visit the Small Business and Self-Employed Tax Center for more resources and guidance.