An S corporation files Form 1120-S every year once its election is in effect, and the penalties for filing late or leaving out information are calculated per shareholder.
This guide explains who files, the due date and extension, how the per-shareholder penalty works with a worked example and what the IRS says about officer pay, using the IRS 2025 Instructions for Form 1120-S.
The IRS says a corporation or other entity must file Form 1120-S if it elected to be an S corporation by filing Form 2553, the IRS accepted the election and the election remains in effect. Do not file Form 1120-S for any year before the election takes effect. If you do not hear whether the IRS accepted the election within 2 months of filing Form 2553 (5 months if you asked for a letter ruling), follow up on 800-829-4933. The election stays in effect until it is terminated. Compare entity choices in our sole proprietor, LLC and S corp comparison.
| Item | Rule |
|---|---|
| Due date | The 15th day of the 3rd month after the tax year ends; for calendar-year corporations March 16, 2026 (March 15 fell on a Sunday) |
| Weekend or holiday | File on the next day that is not a Saturday, Sunday or legal holiday |
| Extension | Form 7004, the automatic extension of time to file |
| E-filing | Required for returns filed from January 1, 2024 if the corporation files 10 or more returns of any type in the calendar year, unless the IRS grants a waiver |
See our filing deadline guide and the partnership equivalent, our Form 1065 guide.
| Failure | Penalty (2025 instructions) |
|---|---|
| Late return or missing information, no tax due | $255 per shareholder for each month or part of a month, up to 12 months |
| Late return with tax due | The $255 amount plus 5% of the unpaid tax per month, up to 25% of the unpaid tax |
| Return more than 60 days late (filed in 2026) | Minimum penalty is the smaller of the tax due or $525 |
| Late payment of tax | 1/2 of 1% of the unpaid tax per month, up to 25% |
| Late or incorrect Schedule K-1 | $340 for each Schedule K-1 |
Our illustration: 3 shareholders and a return filed 2 months late with no tax due is $255 x 3 x 2 = $1,530. The penalties do not apply if the corporation shows reasonable cause. See our penalty abatement guide.
The instructions state that distributions and other payments to a corporate officer must be treated as wages to the extent they are reasonable compensation for services, so owners cannot take everything as distributions. For tax years beginning after 2024, section 174A lets taxpayers deduct domestic research and experimental expenditures, or elect to amortize them over at least 60 months. See our Schedule E guide.