S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.
To qualify for S corporation status, the corporation must meet the following requirements:
S corporation must file its income tax return by the 15th day of the 3rd month after the end of its tax year. S corporation may file the Form 7004 with the IRS by the regular due date of the return to request a 6-month extension of time to file.