Does a Corporation Need to File a Federal Income Tax Return When It Has No Income?

Does a Corporation Need to File a Federal Income Tax Return When It Has No Income?

Under the United States Tax Code, every U.S. corporation that is in business must file a tax return.


Overview

Under the United States Tax Code, all corporations based in the U.S. must file an income tax return whether or not they have taxable income. This is true regardless of whether or not the corporation made any money. 

This tax rule applies to: 

  • C-Corps 
  • S-Corps
  • Partnerships 
  • LLCs that have elected to be taxed as corporations. 

The only exception is for corporations exempt from taxation under 501(c)3 of the Internal Revenue Code. These organizations are commonly referred to as charities, foundations, and non-profits. 


What about S-Corps?

Although filing as an S-Crop frees the company from having to actually pay corporate income taxes - the corporate entity must still file an annual tax return using Form 1120S. This is for the purpose of documenting the entity's profits and losses so that the IRS can accurately track what profits and losses the corporation's shareholders are responsible for filing on their personal taxes.