Form 355s - Massachusetts S Corporation Excise Return

General Information

A corporation may never pay less than the $456

What is a Proper

payment, estimate its tax to be at least equal to the

minimum excise on a return, and this amount can

prior year’s tax. If the prior year’s tax was the min-

never be prorated as Massachusetts law makes no

imum tax, the corporation should make a payment

Return?

provision for the proration of the minimum excise.

or payments equal to the minimum tax to safe-

guard against a possible underpayment penalty.

A proper return is a return upon which all required

When Are

Note: Any corporation having $1 million or more of

amounts have been entered in all appropriate lines

federal taxable income in any of its three preceding

on all forms. Data sheets, account forms or other

Returns Due?

taxable years (as defined in IRC sec. 6655(g)) may

schedules must be available to explain amounts

only use its prior year tax liability to calculate its first

entered on the forms. Referencing lines to enclo-

quarterly estimated tax payment. Any reduction in

Corporate excise returns, together with payment in

sures in lieu of entering amounts onto the return

the first installment payment that results from

full of any tax due, must be filed on or before the

is not sufficient.

using this method must be added to its second in-

15th day of the third month after the close of the

An exact copy of U.S. Form 1120S, including all

stallment payment.

taxable year, calendar or fiscal.

applicable schedules and forms and any other doc-

For more information on corporate estimated taxes,

An extension of time for filing returns will be

umentation required to substantiate entries made

refer to Regulation 830 CMR 63B.2.2, and M.G.L.

granted for reasonable cause upon request. In or-

on this return, must be made available to the De-

Ch. 63B.

der to request an extension, a corporation must file

partment of Revenue upon request.

Form 355-7004 on or before the normal due date

Registration

of the return and pay in full the estimated tax due.

Should the

Corporations with $100,000 or more in receipts

Information

Corporation

or sales must submit their extension request, as

well as any accompanying payment, electroni-

cally. Also, any corporation making an extension

Be Making

A tiered structure is a pass-through entity that

payment of $5,000 or more must make the pay-

has a pass-through entity as a member. The term

ment using electronic means. See TIR 04-30 for

“pass-through entity” refers to an entity whose in-

Estimated

further information.

come, loss, deductions and credits flow through to

members for Massachusetts tax purposes, and in-

Under certain circumstances, if a payment is not

Tax Payments?

cludes partnerships and S corporations. The term

required to be submitted with the extension re-

“member” includes a partner in a partnership and a

quest, the requirement to file the extension may be

All corporations which reasonably estimate their

member of a limited liability company treated as a

waived. For further information, see TIR 06-21.

corporate excise to be in excess of $1,000 for the

partnership in Massachusetts, as well as a share-

taxable year are required to make estimated tax

Note: An extension of time to file is not valid if the

holder in an S corporation. As between two enti-

payments to the Commonwealth. Estimated taxes

corporation fails to pay at least 50% of the total

ties, the pass-through entity that is a member is

may be paid in full on or before the 15th day of

tax liability or the minimum tax of $456, which-

the upper-tier entity, and the entity of which it is a

the third month of the corporation’s taxable year

ever is greater, through estimated payments or with

member is the lower-tier entity. If the S corpora-

or in four installment payments according to the

Form 355-7004.

tion is a member of another pass-through entity,

schedule below.

it should answer “Yes” to this question.

Any tax not paid on or before the due date — with-

◗ 40% of the estimated tax due for the year is

out regard to the extension — shall be subject to

Line 2

due on the 15th day of the 3rd month of the tax-

an interest charge.

A corporation is a section 38 manufacturer for any

able year;

taxable year if it is engaged in manufacturing dur-

What if the

◗ 25% of the estimated tax due for the year is

ing the taxable year and its manufacturing activity

due on the 15th day of the 6th month of the tax-

during the taxable year is substantial. This applies

Taxpayer Is a Fiscal

able year;

whether the corporation is a domestic manufactur-

ing corporation under M.G.L. Ch. 63, sec. 38C or a

◗ 25% of the estimated tax due for the year is

or Short Year Filer?

foreign manufacturing corporation under M.G.L.

due on the 15th day of the 9th month of the tax-

Ch. 63, sec. 42B, and regardless of whether the

able year;

corporation is classified as a manufacturing cor-

File the 2011 return for calendar year 2011 and fis-

◗ 10% of the estimated tax due for the year is

poration under M.G.L. Ch. 58, sec. 2 and Regula-

cal years that began in 2011 and ended in 2012.

due on the 15th day of the 12th month of the tax-

tion 830 CMR 63.58.2.1.

For a fiscal year return, fill in the tax year space at

able year.

the top of page 1. Short year filers should file using

The apportionment factor for corporations en-

Corporations with $100,000 or more in receipts or

the tax form for the calendar year within which the

gaged in substantial manufacturing (section 38

sales must submit their estimated payments elec-

short year falls. If the short year spans more than

manufacturers) is 100% of sales.

tronically. See TIR 04-30 for further information.

one calendar year, the filer should file use the tax

A corporation’s manufacturing activity is substan-

form for the calendar year in which the short year

Note: New corporations in their first full taxable

tial for any taxable year if the corporation meets

began. If the current form is not available at the

year with less than 10 employees have different es-

any of the following tests:

time the short year filer must file, the filer should

timated payment percentages — 30%, 25%, 25%

◗ The corporation derives 25% or more of its

follow the rules explained in TIR 11-12.

and 20% respectively.

receipts for the taxable year from the sale of man-

To avoid a possible underpayment penalty on its

taxes, a corporation should, when making its first

Form 355s - Massachusetts S Corporation Excise Return - 2012 Page 8

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