Summary:
If the corporation has a valid Subchapter S election granted by the Internal Revenue Service and is doing business in South Carolina, the S Corporation Income Tax Return (SC1120S) must be filed. S Corporations are subject to an annual License Fee of .1% of capital and paid-in-surplus, plus $15. The License Fee cannot be less than $25. Both the Income Tax and License Fee are reported on form SC1120S.
Request your extension to file by paying your balance due on our free online tax portal, MyDORWAY, at
dor.sc.gov/pay. Select Business Income Tax Payment to get started. Your payment on MyDORWAY automatically submits your filing extension request. No additional form or paperwork is required. If filing the Application for Automatic Extension of Time to File Corporate Tax Returns (SC1120-T) by paper, be sure to include the name of the corporation and FEIN in the memo line of the check or money order. Attach payment to the form and mail to the address on the form. There is no extension of time for payment of Corporate Income Tax or License Fee. Any Income Tax or License Fee due must be paid by the due date to avoid late penalties and interest. This extension request only extends time to file the SC1120S and does not extend the Withholding Tax on Income of NonResident Shareholders (SC1120S-WH).
S Corporations are required to withhold 5% of the South Carolina taxable income of shareholders who are nonresidents of South Carolina. To avoid penalty and interest, file the SC1120S-WH and submit your Withholding Tax payment by the 15th day of the third month following the S Corporation’s taxable year end. No extension of time to file or pay can be granted for the SC1120S-WH. Refer to SC Code Section
12-8-590(A). Pay online using our free tax portal, MyDORWAY, at
dor.sc.gov/pay. Select Business Income Tax Payment to get started. Payments of $15,000 or more must be submitted electronically according to SC Code Section
12-54-250. The SC1120S-WH cannot be filed electronically. If you pay on MyDORWAY, you must still mail your completed SC1120S-WH to the address on the form.
The Withholding Tax on Income of NonResident Shareholders (SC1120S-WH) must be submitted separately from the S Corporation Income Tax Return (SC1120S) for processing purposes.
The S Corporation must provide each nonresident shareholder a 1099-MISC form with the verbiage “South Carolina Only” written at the top. This form must show the respective amount of state income and tax withheld.
The S Corporation does not need to withhold on behalf of any shareholder participating in a composite return. Shareholders participating in a composite return do not need to pay Estimated Tax. A non-resident shareholder may provide the S Corporation with an affidavit, Form I-309, agreeing that they will pay and be individually responsible for any SC tax, interest, and/or penalties which may be due. The S Corporation may attach such affidavit to the SC1120S-WH and the S Corporation would therefore, not be required to withhold Income Tax on behalf of such shareholder. If an affidavit has been previously filed, it should not be resubmitted.
New for 2021 Tax Year
A qualifying S Corporation, including an LLC taxed as a S Corporation, can elect to have its active trade or business income taxed at the entity level instead of the shareholder level. A qualifying S Corporation is one whose owners are all:
- individuals
- estates
- trusts
- entities not included in SC Code Sections 12-6-530 through 12-6-540
- entities not included in SC Code Section 12-6-550, or
- other entities not exempt from South Carolina Income Tax.
This election is made annually at the S Corporation level on the SC1120S on behalf of all shareholders. Mark the box on page 1 of the SC1120S to make your Active Trade or Business election. Electing qualified S Corporations must use the I-435, Active Trade or Business Income For Electing Partnerships and S Corporations, to identify active trade or business income and calculate the tax due. S Corporations will use the SC1120S K-1, Shareholder's Share of South Carolina Income, Deductions, Credits, Etc., to report to each shareholder their share of the active trade or business income taxed at the S Corporation level.
For more information, refer to SC Revenue Ruling
21-15.
Due Dates:
File annually on or before the 15th day of the third month after the close of the taxable year except for the initial and/or final return.
The Tentative Corporate Tax Return (
SC1120-T) is due on or before the 15th day of the third month after the close of the taxable year.
The Withholding Tax on Income of NonResident Shareholders (
SC1120S-WH) with payment is due on or before the 15th day of the third month after the close of the taxable year. Failure to file this return, along with full payment of the tax due, by the due date will result in late file and pay penalties along with interest being imposed.
Business Income Tax Refund Status:
To check the status of your current year South Carolina Business Income Tax refund, you will need to
enter the following information on MyDORWAY:
-
FEIN (Federal Employer Identification Number)
-
Refund Amount
