S-Corp
A U.S. corporation that elects Subchapter S tax treatment to pass profits through to shareholders' personal returns, avoiding C-Corp double taxation.
An S-Corporation is a tax election (made via Form 2553), not a separate entity form. An LLC or C-Corp can elect S-Corp status to pass profits through to shareholders, who report and pay personal income tax. S-Corps must have only U.S.-resident or U.S.-citizen shareholders, capping at 100 — which makes S-Corp election unavailable to non-residents. The main benefit (saving on self-employment tax via reasonable salary + distributions) does not apply to non-resident-owned LLCs.
Also known asS Corporation, Subchapter S Corporation
Related terms
- C-Corp — A U.S. corporation taxed under Subchapter C of the Internal Revenue Code, with corporate-level tax on profits …
- LLC — A U.S. legal-entity form combining the limited liability of a corporation with the pass-through taxation of a …