Ohio requires an S corporation to file a notice of the S election. To file, use Form FT-1120-S between January 1 and March 31 each year. Shareholders are taxed based on their distributive share of income under Internal Revenue Code section 1366. Nonresident shareholders are subject to the Ohio individual income tax.
Tax Filing Procedures and Forms
To file an S corp tax return:
- Prepare financial statements.
- Issue Forms W-2.
- Prepare Form 1120-S.
- Distribute Schedules K-1.
- File Form 1040.
Differences Between S and C Corporations
S corporations avoid corporate taxes but owners owe personal taxes. C corporations pay taxes then owners owe taxes on dividends.
Commercial Activity Tax (CAT)
The CAT taxes a company’s total Ohio business receipts without deductions. Corporations with over $1 million in taxable gross receipts must file and pay quarterly. Others file annually.
Gross Receipts Taxes
Only South Dakota and Wyoming lack both gross receipts taxes and corporate income taxes.
Filing Requirements for Different Corporation Types
1120-S is filed by S corps. C corporations file Form 1120.
Forming an Ohio S Corporation
To form an Ohio S corp, either an LLC elects S corp status or a corporation elects it.