Pennsylvania S Corp Election: What You Need to Know

by
Selecting the appropriate company entity is one of the initial decisions you must make when starting a business, which may be a difficult undertaking. Due to its tax advantages and restricted liability, a S company (S Corp) is the best choice for some business owners. However, you must comprehend the rules and specifications of the state of Pennsylvania before establishing a S Corp there.

Do S Corp Elections Need to Be Separate in Pennsylvania?

No, a separate S Corp election is not required in Pennsylvania. Instead, the Internal Revenue Service (IRS) must receive your S Corp election because the state recognizes S Corporations as a federal tax classification. You can file for a S Corp business registration in Pennsylvania once the IRS has approved your S Corp election. How Do I Create a S Corp in Pennsylvania?

In Pennsylvania, you must take the following actions to establish a S Corp:

1. Pick a name that’s distinct. Any other business entities registered in Pennsylvania must not share your company name. 2. Submit Articles of Incorporation: The Pennsylvania Department of State must receive your Articles of Incorporation, and a filing fee of $125 must be paid. 3. Obtain an Employer Identification Number (EIN) from the IRS.

4. Draft Bylaws. Your company needs bylaws that specify the rules and regulations regulating the corporation. 5. Hold an Organizational Meeting: To approve your bylaws, choose officers, and distribute stock certificates, you must hold an organizational meeting. 6. Submit Annual Reports: In Pennsylvania, S Corps are required to submit an annual report and pay a charge of $70. How Much Does It Cost to Form a S Corp in Pennsylvania?

The price of forming a S Corp in Pennsylvania is determined by a number of elements, including legal fees, filing costs, and other related expenses. The yearly report price is $70, while the filing charge for articles of incorporation is $125. Legal and financial costs, however, can add up quickly. The easiest way to find out the overall cost of forming a S Corp in Pennsylvania is to speak with an attorney or accountant. Do I Have to Submit a Pa RCT 101?

Yes, S Corps must submit Pa RCT 101, the Pennsylvania Corporate Tax Report, in Pennsylvania. This report must be submitted no later than the 15th day of the third month after the end of the corporation’s tax year. The report contains details about the corporation’s earnings, tax obligations, and deductions. Is a Single Member LLC Recognized in Pennsylvania?

Yes, single-member LLCs are accepted as legitimate business entities in Pennsylvania. Single-member LLCs offer the owner minimal liability protection, and their revenue is subject to individual taxation. However, you must submit Form 2553 to the IRS if you want to choose S Corp status for your single-member LLC.

In conclusion, S Corporations are recognized as a federal tax classification in Pennsylvania, which does not demand a separate S Corp election. You must file Articles of Incorporation, receive an EIN, design bylaws, hold an organizational meeting, and submit annual reports in order to establish a S Corp in Pennsylvania. You must submit Pa RCT 101, and the cost of forming a S Corp in Pennsylvania depends on a number of variables. Single-member LLCs are recognized as legal entities in Pennsylvania, but if you want to elect S Corp status, you must submit Form 2553 to the IRS.

FAQ
Accordingly, what is an s corp in pa?

A corporation that has chosen to be taxed in Pennsylvania under Subchapter S of the Internal Revenue Code is known as a S corporation. This indicates that the income, credits, and deductions of the corporation are passed through to its shareholders, who record them on their personal tax forms. In other words, for the purpose of federal income taxation, a S corporation in Pennsylvania is a pass-through organization.

Leave a Comment