S Corporation

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S CORPORATION

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Summary

Phone: 1-844-898-8542
Fax: 803-896-1682
Email: CorpTax@dor.sc.gov

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S Corporation Frequently Asked Questions

Active Trade or Business Income Tax Election

Can an S Corporation elect to pay active trade or business income tax at the entity level?

Beginning with the 2021 tax year, a qualifying S Corporation, including an LLC taxed as an S Corporation, can elect to have its active trade or business income taxed at the entity level instead of the shareholder level.

For more information, refer to SC Revenue Rulings 21-15 and 22-5.

How does an S Corporation make the election to pay active trade or business income tax at the entity level?

The 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.

How does an S Corporation identify active trade or business income and calculate the tax due?

S Corporations use the I-435 to identify active trade or business income and calculate the tax due.

How do S Corporations report to each shareholder their share of the active trade or business income taxed at the S Corporation level?

S Corporations will use the SC1120S K-1 to report to each shareholder their share of the active trade or business income taxed at the S Corporation level.

Administrative

How do I set up a corporate account for an S Corporation with the SCDOR?

Filing a Corporate Tax return automatically registers you with the SCDOR. If this is your first return filed, check the Initial Return box on the front of the SC1120S.

Once your Corporate Income Tax account is registered with the SCDOR, we will send you a Corporate Registration Filing Requirements letter (SC1070). This letter includes important information about your Corporate Income Tax filing requirements. To avoid processing delays, be sure to include your FEIN on all returns, payments, and correspondence sent to the SCDOR.

You are required to file a CL-1 (Initial Annual Report of Corporations) and pay the $25 initial Corporate License Fee within 60 days of doing business or using capital in the state of South Carolina. This fee should be paid to the SCDOR if you have not already done so with the South Carolina Secretary of State (SCSOS).

The SCDOR has no role in requiring a Certificate of Authority with the SCSOS to do business in South Carolina. Questions about who is required to have a Certificate of Authority should contact the SCSOS. The requirements for a Certificate of Authority are in Chapter 15 Title 33 of the South Carolina Code of Laws.

What form do I use to file a return for an S Corporation and when is the return due?

S corporations file the SC1120S. The SC1120S is due by the 15th day of the third month after the tax year end.

Income Tax Period End	Return Due By	Extension Date
January 31	April 15	October 15
February 28	May 15	November 15
March 30	June 15	December 15
April 30	July 15	January15
May 31	August 15	February 15
June 30	September 15	March 15
July 31	October 15	April 15
August 31	November 15	May 15
September 30	December 15	June 15
October 31	January 15	July 15
November 30	February 15	August 15
December 31	March 15	September 15

Amended Returns

How do I file an amended return?

To amend an SC1120S, complete a new form and check the Amended box on the front of the return. With the filing of the amended SC1120S, include an explanation for the adjustments, a copy of the federal amended return, and a copy of the original filed return. If a copy of the original return is not provided, the amended return will not be processed.

How much time do I have to file an amended return once the IRS completes an audit of a corporation?

Once the IRS completes the audit, a corporation has 180 days to file an amended return with SCDOR. The signed and dated IRS forms 4549 and 870 need to be included with the amended return, along with the 1574 letter, if available. An explanation of the adjustments must be attached to the amended return, along with a copy of the original filed return. If a copy of the original return is not provided, the amended return will not be processed.

Extension

Can I request an extension of time to file my return?

Use the SC1120-T to request an extension of time to file a Corporate Tax return.

Save time and paper! Request your extension to file by paying your balance due on our free tax portal, MyDORWAY. 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 your SC1120-T by paper, make your check payable to SCDOR and include your name, FEIN, Income Tax period ending, and SC1120-T in the memo. Do not send cash. Mail your SC1120-T and payment in one envelope to the address on the form.

An extension of time for filing does not extend the time for paying Corporate Income Tax or License Fee. Underpayment penalties and interest will apply if 90% of the Income Tax and License Fee is not paid by the original due date of the return.

Will a federal extension be accepted to extend the South Carolina Corporate Tax Return?

If you do not anticipate owing tax, and you requested a federal extension of time to file your federal Income Tax return, we will accept a copy of the properly filed federal extension as long as the Corporate Tax return is received within the extended time allowed by the IRS.

Estimated Taxes

When are Estimated Tax payments due?

Corporations must make Estimated Tax payments if their Estimated Tax (Income Tax, Active Trade or Business Tax, or License Fee, less credits) is determined to be $100 or more. Quarterly installments are due by the 15th day of the fourth, sixth, ninth, and twelfth months of the tax year.

How do I make Estimated Tax payments?

Corporations can pay Estimated Income Tax payments online using our free tax portal, MyDORWAY. Select Business Income Tax Payment to get started. Do not submit the SC1120-CDP if you pay online.

Corporations can also pay Estimated Income Tax payments electronically through Electronic Funds Transfer (EFT). To get started the company must register with the SCDOR. The registration process takes up to three weeks. If you are interested in the EFT program, complete and submit a D-128.

If filing by paper, mail the completed SC1120-CDP along with payment to: SC Department of Revenue, Corporation Voucher, PO Box 100153, Columbia, SC 29202. Make your check payable to SCDOR. Include your name, FEIN, tax year, and SC1120-CDP in the memo. Do not send cash.

Your FEIN (Federal Employer Identification Number) is required to ensure proper credit of payments submitted. Providing an incorrect FEIN will result in processing delays and errors in posting the payments.

Nonresident Withholding

What is the withholding required by an S Corporation for shareholders who are nonresidents of South Carolina?

Corporations are required annually to withhold 5% (.05) of the South Carolina taxable income of shareholders who are nonresidents of South Carolina.

A nonresident shareholder may provide the S Corporation with an I-309 affidavit agreeing the shareholder is subject to the jurisdiction of the SCDOR and the courts of this State for purposes of determining and collecting South Carolina tax, interest, and penalties that may be due. The S Corporation may attach the I-309 to the SC1120S-WH and the S Corporation is not required to withhold Income Tax on behalf of such shareholder. If the S Corporation has no South Carolina taxable income for the year, the filing of the SC1120S-WH is not required. S Corporations that report the income of their nonresident shareholders on a composite return are not required to withhold tax, file SC1120S-WH or file the I-309.

What form do I use to pay the nonresident withholding withheld on behalf of nonresident shareholders of an S Corporation?

The Income Tax withheld is paid using for SC1120S-WH. Payment must be made by the 15th day of the third month following the taxable year end. Taxpayers requesting an extension of time to file the SC1120S must estimate an amount of income subject to withholding. There is no extension for filing the SC1120S-WH.

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.

Failure to file the SC1120S-WH, along with full payment of the tax due, by the 15th day of the third month following the taxable year end of the S Corporation, will result in late file and late pay penalties along with interest.

The SC 1120S-WH must be submitted separately from the SC 1120S.

Payments made by SC 1120-CDP, SC 1120-T, or SC1040ES cannot be applied to the SC1120S-WH. Any overpayment on the SC1120S cannot be transferred to the SC1120S-WH. The overpayment on an SC1120S must be refunded or applied as a credit carry-forward to the next tax year.

What is the due date of the SC1120S-WH?

The Income Tax withheld must be paid by the 15th day of the third month following the taxable year end of the S Corporation. There is no extension for filing the SC1120S-WH or making the payment.

Pay online using our free tax portal, MyDORWAY, at dor.sc.gov/pay. Select Business Income Tax Payment to get started. If you pay on MyDORWAY, you must still mail your completed SC1120S-WH return to: SCDOR, Corporate Taxable, PO Box 100151, Columbia, SC 29202.

If you pay by check, make payable to SCDOR and include your business name, FEIN, and “SC1120S-WH” in the memo.

How can a nonresident shareholder of an S Corporation claim credit for withholding?

The S Corporation must provide nonresident shareholders an 1099-MISC with "South Carolina Only" written at the top showing respective amounts of income and tax withheld. Each nonresident shareholder must attach a copy of the 1099-MISC to their respective Income Tax return as verification for claiming credit for this withholding.

Payments made on the SC 1120S-WH cannot be claimed as payments on the SC 1120S and can only be claimed at the shareholder level.

The SC 1120S-WH is not required to be filed if the S Corporation has no South Carolina taxable income for the year. S Corporations that report the income of their nonresident shareholders on a composite return are not required to withhold tax, file an SC 1120S-WH or file affidavits.

If I am filing an extension (SC1120T) for my S Corporation, do I still need to withhold 5% of the South Carolina taxable income of the shareholders who are nonresidents of South Carolina?

Yes. S corporations requesting an extension of time to file the SC1120S must estimate South Carolina taxable income of nonresidents and pay 5% (.05) withholding tax on this amount. File the SC 1120S-WH by the 15th day of the third month following the taxable year end.

There is no extension for filing the SC1120S-WH or making the payment.

Can I apply payments made on the SC1120S-WH to my S Corporation?

No. Payments made on the SC1120S-WH cannot be claimed as payments on SC1120S. Payments made on the SC1120S-WH are claimed on the Individual Income Tax return (SC1040) of the shareholder.

Can I request a refund of the monies paid on an SC1120S-WH?

No. A refund must be requested by the shareholder on an SC1040.

Can I request an extension of time to file or pay for the SC1120S-WH?

No. There is no extension for filing the SC1120S-WH or paying the taxes owed. The SC1120S-WH must be filed and the taxes paid by the 15th day of the third month following the taxably year end of the S Corporation.

Can Estimated Tax payments be made for the nonresident withholding (SC1120S-WH?

No. Estimated payments cannot be made for the non-resident withholding.

Can payment for the SC1120S-WH be made on MyDORWAY?

Yes. Pay online using our free tax portal, MyDORWAY, at dor.sc.gov/pay. Select Business Income Tax Payment to get started.

If you pay on MyDORWAY, you must still mail your completed SC1120S-WH return to: SCDOR, Corporate Taxable, PO Box 100151, Columbia SC 29202.

If you pay by check, make payable to SCDOR and include your business name, FEIN, and “SC1120S-WH” in the memo.

If payment for the SC1120S-WH is made on MyDORWAY, is the completed SC1120S-WH required to be mailed to the SCDOR?

Yes. The completed SC1120S-WH return must be mailed to the SCDOR at: SCDOR, Corporate Taxable, PO Box 100151, Columbia SC 29202. If you pay by check, make payable to SCDOR and include your business name, FEIN, and “SC1120S-WH” in the memo.

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