Subchapter S corporation reports; taxation of shareholders

Authority: IC 6-8.1-3-3

Affected: IC 6-3-2-2.8

Sec. 67. Subchapter S Corporations Filing Requirements. Qualified Subchapter S corporations will file an annual return, Form It-20S on or before the fifteenth day of the fourth month following the close of the corporation's tax year. The first annual return of the corporation must be accompanied by copies of Federal Form 2553, Election by Small Business Corporation, and by Federal Form 1120S covering the corporation's first-year business activities. Corporations must designate their Federal business activity code numbers in the appropriate place on the return, as well as designating their Federal identification numbers. Annual returns must be filed by any Subchapter S corporation incorporated in Indiana or having income from Indiana sources.

Indiana resident shareholders of a Subchapter S corporation that conducts business in more than one state are subject to the adjusted gross income tax on their entire share of the corporation's income. They may, however, be allowed a credit for any taxes paid to another state on this income. Such credit will be pursuant to the provisions of Regulation 6-3-3-3(a)(010) [ 45 IAC 3.1-1-74 ] .

Nonresident shareholders of a Subchapter S corporation conducting business both within and without Indiana must divide their income by using the corporate division of income provisions contained in Regulation 6-3-2-2(b)(010) [ 45 IAC 3.1-1-37 ] et seq. In particular, these shareholders must apportion their business income on the three-factor formula outlined in Regulation 6-3-2-2(b)(030) [ 45 IAC 3.1-1-39 ] .

Any Subchapter S corporation which is a member of a partnership, joint venture, or pool will cause such partnership, joint venture, or pool to become subject to gross and adjusted gross income tax. See Regulation 6-3-7-1(b)(010) [ 45 IAC 3.1-1-151 ] . In that case, the partnership, joint venture, or pool will file annual return IT-65T and pay the tax shown to be due thereon. Profits from such entities are deductible by the corporation on its annual return.

Subchapter S corporations are required to make information returns as described in Regulation 6-3-4-9(010) [ 45 IAC 3.1-1-104 ] .