S Corporation FAQs

I am a resident of Missouri and a shareholder of a Subchapter S corporation earning income in another state. The other state imposes a tax on the net income of the S corporation, but does not impose any tax on or measured by the income of any individuals. Am I allowed to claim a resident credit based on the tax on the S corporation?

Yes. Section 143.081, RSMo, provides that each resident S corporation shareholder shall be considered to have paid a tax imposed on the shareholder in an amount equal to the shareholder’s pro rata share of any net income tax paid by the S corporation to a state which does not measure the income of shareholders on an S corporation by reference to the income of the S corporation.

I am a resident of Missouri and a shareholder of a Subchapter S corporation earning income in another state. The other state taxes the income of the S corporation shareholders, and the S corporation has filed a composite return and made a composite payment of income tax on my behalf. Am I allowed to claim a resident credit based on the S corporation’s composite payment of income tax on my behalf?

Yes. Under Section 143.081, RSMo, a resident S corporation shareholder shall be considered to have paid a tax imposed by another state on the shareholder where a composite return and composite payment are made in such state on behalf of the S shareholder by the S corporation.

I am a resident of Missouri and a partner of a partnership earning income in another state. The other state taxes the income of the partnership’s partners, and the partnership has made a payment of income tax on my behalf. Am I allowed to claim a resident credit based on the amount of income tax imposed on me by that state, even though the partnership has made a payment of that income tax on my behalf?

Yes. Under Section 143.081.1, RSMo, the resident credit is based on the income tax imposed by another state on income derived from sources in that state, if that income is also subject to Missouri income tax. This includes another state’s income tax imposed on a Missouri resident who is a partner in a partnership, even if the partnership has made a payment of income tax on the partner’s behalf.

If you still have questions, please check out other Business Tax FAQs.

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