S Corporations – New Withholding Rule for the 2009 Form 100S
Beginning tax year 2009, S corporations may claim withhold at source on their S corporation return, but not in excess of their tax liability. Since S corporations are taxed at the entity level, they can choose to:
- Allocate the withholding credit to their S corporation shareholders.
- Claim the withholding on the S corporation tax return (not to exceed the amount of tax).
- Use a combination of both the above.
S corporations may not receive a refund of withholding on Form 100S.
Next Step-Allocating Withhold at Source
Any remaining withhold at source credit in excess of the tax liability must be allocated to the S corporation shareholders using Form 592.
Need more information about withholding?
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