Corporations, limited liability companies, and certain other business entities can make an election with the Internal Revenue Service to be taxed under Subchapter S of the Internal Revenue Code. If such an election is made, the business entity becomes an “S corporation” for federal income tax purposes, and also under the tax laws of many states. The S corporation must file an annual tax return with the Internal Revenue Service (Form 1120S), and an annual state income tax return with those states that recognize S corporations. The S corporation does not pay income tax, and its ...
The State of South Carolina has now adopted legislation allowing “pass through” entities to elect each year to be taxed at the entity level on their active trade or business income instead of having their owners taxed at the individual level on this income. This includes partnerships, S-corporations and LLCs taxed as partnerships or S-corporations. This election can be filed for tax years beginning after December 31, 2020.
South Carolina has now joined a growing number of states that have enacted federal state and local tax “workaround” legislation, and which shifts state ...