Corporate Taxation in Indiana
Corporations in Indiana must file and pay income taxes to the Department of Revenue (DOR). The 2023 corporate tax rate is 4.9%.
- Tax returns for C corporations (Form IT-20) and S corporations (Form IT-20S) are due by May 15 for calendar year filers.
- Corporations can file electronically or by mail.
- Corporations with over $1 million in gross income must use Modernized e-File (MeF) software.
S Corporation Taxation in Indiana
How is an S Corp taxed in Indiana? S Corps are considered pass-through entities, with profits and losses passed through to shareholders and taxed at their individual tax rates. Indiana does impose a corporate income tax on S Corps, set at a rate of 5.25%.
LLC vs. S Corporation in Indiana
What is the difference between an LLC and an S Corp in Indiana?
- LLCs provide liability protection for owners.
- An S corporation itself does not provide liability protection; it comes from the underlying LLC or corporation structure.
In Indiana:
- An LLC can have unlimited members, while S Corps have a 100 shareholder maximum.
- Non-U.S. citizens/residents cannot become S corp shareholders but may join as LLC members.
- LLCs allow flexible management and ownership structures, while S corps require formal records and meetings for the board and shareholders.
Conclusion
- Both S corps and LLCs provide liability protection and flexibility in structure.
- The main difference lies in taxation requirements:
- LLCs pass all earnings directly to members.
- S corps allow dividends distributions not subject to employment tax.