Income Tax for S Corporations

A corporation filing as an S corporation for federal income tax purposes must file Idaho Form 41S if either of the following are true:

• You’re doing business in Idaho.
• You’re registered with the Idaho Secretary of State to do business in Idaho.

Idaho accepts the federal approval of the S corporation election. Include a copy of the federal approval or a federal Form 2553 with your Form 41S the first year you file.

Doing business in Idaho includes, but isn’t limited to, the following activities:

• You own or lease, as a lessor or lessee, any property in Idaho.
• You solicit business in Idaho.
• You’re a member of a partnership or S corporation with business in Idaho.
• You have any Idaho activity from which you receive, realize or derive income.
• You have an agent — such as a collector, repair person, or delivery person — acting on your behalf in Idaho.

Exemptions

An S corporation under the protection of Public Law 86‑272 is exempt from filing an Idaho income tax return.

Other business entities

Still not sure if you should file a business income tax return as a corporation? Explore the other business entity types that must file an Idaho tax return:

Tax rates

The Idaho business tax rate is on taxable income. Below is a history of tax rates:

Tax due for nonresident individual shareholders

An S corporation is required to pay pass-through withholding on a nonresident individual shareholder’s income from that S corporation. This income includes wages, salaries, any other compensation, and the individual’s share of income, loss or deductions.

If an S corporation chooses not to withhold, they have two other options:

• Composite return—the S corporation pays the tax for the individual owner on the entity’s return at the corporate rate.
• Nonresident Owner Agreement—the individual owner can submit a signed agreement (Form PTE-NROA) to the S corporation and the S corporation doesn’t include the individual in a composite return or pay withholding to the Tax Commission on the owner’s behalf.

S corporations that pay tax for individual shareholders on a composite return can’t take all the same deductions that Idaho allows on an individual return. For example, S corporations aren’t allowed deductions for carryovers or carrybacks of net operating losses, capital losses, or personal exemptions.

These provisions apply to an S corporation that’s doing business in Idaho.

See additional information, including Forms PTE-12 and PTE-01, on our Pass‑through Entity page.

What to file

Include a complete copy of your federal income tax return with your Idaho business income tax return.

Assembling your tax return

To make sure your return is correctly processed, include all forms and schedules in the following order:

• Form 41S, pages 1 and 2
• Form 42
• Form 75
• Form 44
• Form PTE-12, if applicable
• Form(s) ID K-1, if applicable
• Additional schedules in alphabetical order
• Additional forms in numerical order
• Complete copy of federal return

Find business income tax forms for prior years

Amended returns

Use Form 41S to amend your Idaho income tax return. Make sure you check the Amended Return box and enter the reason for amending.

If you amend your federal return, you also must file an amended Idaho income tax return. The Idaho statute of limitations for receiving a refund is three years from the due date of the return or the date you filed the return, whichever is later.

When to file

File your Idaho income tax return on or before the 15th day of the fourth month following the close of your tax year. For a calendar year filer, this is April 15. If the last day for filing a return falls on a Saturday, Sunday, or legal holiday, the return is on time if you file it on the next business day.

Extensions

Penalties and interest

Learn more on our Penalties and Interest page.

Where to file

E-file your return

The Tax Commission, with the IRS, allows electronic filing of federal and state business income tax returns. To see a list of software companies that provide this service, visit our Filing Business Income Taxes Online page.

Mail your return

See our mailing address information on our Contact Us webpage.

Payments

Visit our E-pay page for more information about electronic payments.