Glossary
Form 1120-S (S-corporation return)
The annual return for a corporation or LLC that has elected S-corp status. Income passes through to shareholders on K-1s; the entity owes no federal income tax.
An S-corp files Form 1120-S by March 16 (September 15 on extension) and issues a Schedule K-1 to each shareholder. It must also run payroll for owner-employees, because the IRS requires a reasonable salary before distributions. The late filing penalty is per shareholder per month, the same as a partnership.
States vary: most recognise the federal election, California charges 1.5% at entity level, New York requires its own election and New York City ignores S status entirely, Tennessee applies its excise tax. The 1120-S is also where a wrongly small salary becomes visible to the IRS, since officer compensation is reported on its own line.
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