S corporations (S corps) are a popular business structure for small business owners because they combine the liability protection of a corporation with the tax benefits of pass-through taxation. However, NYC does not recognize S corporations. Typically, S corporations are subject to the General Corporation Tax (GCT).

Salaries are subject to payroll taxes (Social Security and Medicare), but distributions are not. The IRS requires a salary to prevent underpayment of taxes and ensure compliance.

NY PTET (Pass-Through Entity Tax) is a state tax designed to help business owners work around the $10,000 SALT deduction cap.

The Corporate Transparency Act (CTA) requires businesses to submit Beneficial Ownership Information (BOI) reports to the U.S. Department of the Treasury detailing ownership and control of companies.