Massachusetts Form 355S is the annual corporate excise return every S corporation with Massachusetts nexus must file, due on the 15th day of the third month after the close of the tax year. Even an S corporation that owes nothing beyond the $456 minimum excise has to file it, and the return must be submitted electronically along with any tax payment.
Who Has to File
Any S corporation with nexus in Massachusetts files Form 355S. Nexus can come from physical presence (property or employees in the state) or from economic activity. Economic nexus is presumed once sales sourced to Massachusetts exceed $500,000 in a taxable year, with no physical footprint required.1Mass.gov. 830 CMR 63.39.1 – Corporate Nexus
Your entity must already have a valid federal S election on file through IRS Form 2553.2Internal Revenue Service. About Form 2553, Election by a Small Business Corporation Massachusetts recognizes the federal election automatically; there is no separate state-level election.3Legal Information Institute. 830 CMR 62.17A.2 – Restatement of Massachusetts Taxation of S Corporations Filing is required whether the corporation is incorporated in Massachusetts or is a foreign corporation doing business here, and it applies even when total receipts fall well below the $6 million line where the income measure kicks in. The floor is the $456 minimum excise.
What You’ll Need From the Federal Return
Form 355S starts with your federal numbers. Ordinary business income and separately stated items come off federal Form 1120-S and its Schedule K.4Internal Revenue Service. Instructions for Form 1120-S Then you make Massachusetts adjustments: add back state income taxes deducted federally, subtract items like interest on U.S. government obligations that Massachusetts exempts.
If the corporation does business inside and outside Massachusetts, you’ll also need apportionment data. Massachusetts uses a single-sales-factor formula for most general business corporations, so income is apportioned based on the ratio of Massachusetts sales to total sales.5Mass.gov. Single Sales Factor
Schedule S captures each shareholder’s name, address, tax ID, ownership percentage, and residency status. Those entries drive Schedule SK-1, the Massachusetts equivalent of a federal K-1, which tells each shareholder their share of income, deductions, and credits.
How the Tax Is Calculated
The corporate excise has two components: an income measure and a non-income measure. Smaller S corporations often deal only with the non-income measure and the minimum, because the income measure applies only above a gross-receipts threshold.
Income Measure
The income measure is tiered by total gross receipts:6Mass.gov. S Corporations
- Under $6 million: no income measure applies.
- $6 million to under $9 million: 2.00% on net income apportioned to Massachusetts.
- $9 million or more: 3.00% on net income apportioned to Massachusetts.
Non-Income Measure and Minimum
Every S corporation is subject to the non-income measure at $2.60 per $1,000 of either taxable Massachusetts tangible personal property or taxable net worth, whichever is higher.7Mass.gov. Massachusetts DOR Corporate Excise Tax Guide If the combined income and non-income measures come out below $456, you pay the $456 minimum excise.6Mass.gov. S Corporations
Non-Resident Shareholders
If any shareholders live outside Massachusetts, the corporation must withhold on their share of Massachusetts-source income at the 5% flat personal income tax rate, filing Form PTE-WH with quarterly estimated payments.8Mass.gov. Tax Guide for Pass-Through Entity Withholding
The alternative is a composite return on Form MA NRCR, which lets the corporation pay for participating non-resident individual shareholders in one filing.9Mass.gov. Massachusetts Nonresident Composite Tax Forms The composite tax uses the personal income tax rate and includes the 4% surtax on taxable income above the inflation-adjusted threshold (that threshold was $1,083,150 for 2025; DOR publishes the updated figure each year).10Mass.gov. Massachusetts 4% Surtax on Taxable Income Non-resident shareholders included on a composite return don’t have to file their own Massachusetts non-resident return.
Deciding on the Pass-Through Entity Excise
Massachusetts offers an elective pass-through entity (PTE) excise under Chapter 63D, built as a workaround for the federal cap on state and local tax deductions. If the corporation elects in, it pays a 5% excise at the entity level on income that would otherwise be taxed to the shareholders individually.8Mass.gov. Tax Guide for Pass-Through Entity Withholding
Qualifying members (natural persons, estates, or trusts subject to Massachusetts personal income tax, whether resident, non-resident, or part-year) can claim a credit equal to 90% of their distributive share of the PTE excise paid.11Mass.gov. Elective Pass-through Entity Excise The election is made on a timely filed return and applies to the entire tax year, so decide with your shareholders before filing.
Credits That Flow Through
An S corporation may claim Massachusetts credits such as the Economic Opportunity Area Credit and the Research and Development Credit against the corporate excise on Form 355S. Any excess passes through to shareholders on Schedule SK-1. Each credit has its own supporting Massachusetts form, and you’ll need to attach them.
Filing Deadline, Extension, and Estimated Payments
Form 355S is due on the 15th day of the third month after the close of the taxable year. For calendar-year filers, that’s March 15.12Commonwealth of Massachusetts Department of Revenue. 2025 Instructions for Massachusetts S Corporation Return Form 355S
Massachusetts grants an automatic extension to file, provided you’ve paid the greater of 50% of the total tax ultimately due or the minimum excise by the original due date.13Mass.gov. Massachusetts DOR Tax Due Dates and Extensions A federal extension does not count as a Massachusetts extension, and the extension is to file, not to pay. Any balance owed after the original due date accrues interest and penalties.
If the corporation expects its excise to exceed $1,000 for the year, estimated payments are required.14Mass.gov. Massachusetts DOR Corporate Excise Tax Estimated Payments For calendar-year 2026 filers, the four installments fall on:13Mass.gov. Massachusetts DOR Tax Due Dates and Extensions
- First installment: March 16, 2026
- Second installment: June 15, 2026
- Third installment: September 15, 2026
- Fourth installment: December 15, 2026
Underpayment is calculated on Form M-2220 with the annual return. One safe harbor: no penalty applies if estimated payments equal or exceed 90% of the tax shown on the current-year return.15Mass.gov. AP 331: Corporate Estimated Tax Payments
How to File and Pay
Form 355S must be filed electronically. If the corporation isn’t requesting alternative apportionment and isn’t a mutual fund service corporation, it can file directly through MassTaxConnect. Everyone else files electronically through approved commercial tax software.16Mass.gov. TIR 21-9 – Expansion of Certain Electronic Filing and Payment Requirements All payments, including estimated taxes and any final balance due, must be made electronically through MassTaxConnect.
Penalties for Missing the Deadline
Two penalties can run at once:
- Late filing: 1% of the unpaid tax for each month or part of a month the return is overdue, capped at 25%.17Mass.gov. Massachusetts Tax Penalty Rates
- Late payment: 1% of the unpaid tax for each month or part of a month the payment is late, also capped at 25%.18Mass.gov. 830 CMR 62C.33.1 – Interest, Penalties, and Application of Payments
Interest accrues on top of both. That’s the practical reason to pay by the original due date even when you’re taking the extension to file.
Records to Keep
Keep everything used to prepare Form 355S for at least three years after the later of the return’s due date or the date you actually filed.19Mass.gov. 830 CMR 62C.25.1 – Record Retention Three years is the floor. In fraud, non-filing, or cases where an omission exceeds 25% of the gross amount that should have been reported, DOR has no time limit. If you’ve claimed a refund or abatement, hold the records until the claim is fully resolved.
A Separate Filing You Shouldn’t Confuse
Form 355S is a tax return. Massachusetts business corporations also file an annual report with the Secretary of the Commonwealth, which is a corporate compliance filing, not a tax filing. The fee is $125 on paper or $100 electronically, and $150 if late.20Secretary of the Commonwealth of Massachusetts. Filing Fees Filing Form 355S does not satisfy the annual report obligation, and skipping the annual report can eventually lead to administrative dissolution.