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LLC filing as S-Corp Eligibility on working with EAD

scsvel — Tue, 25 Feb 2025 20:06:44 GMT

Hello all,

Can we file taxes as S-Corp for the Single member LLC when the LLC owner is working in US with EAD? Or Do we need to have green card for this scenario?

Re: LLC filing as S-Corp Eligibility on working with EAD

pk — Tue, 25 Feb 2025 20:23:56 GMT

@scsvel , Before one can answer this , we need more information on the NRA with EAD.

(a) NRA citizenship ( for Treaty assertions ) and in the US with which visa ( F, Q, J, ?? )?

(b) Which state is the S-Corp registered in ?

(c) EAD tells you what you can and cannot do ( for the entity/institution that sponsored you ) or through the category code -- so what code do you have ?

I will circle back once I hear from you ?

Re: LLC filing as S-Corp Eligibility on working with EAD

scsvel — Wed, 26 Feb 2025 11:23:27 GMT

@pk please find the answers below.

(a) NRA citizenship ( for Treaty assertions ) and in the US with which visa ( F, Q, J, ?? )?

[ Indian citizen and working with Green card based EAD as GC is filed and pending Adjustment of Status. Before that worked with H1B on W2 FTE]

(b) Which state is the S-Corp registered in ?

[ It's Pennsylvania ]

(c) EAD tells you what you can and cannot do ( for the entity/institution that sponsored you ) or through the category code -- so what code do you have ?

[ This is self petioned category and no employer sponsored. EAD issued based on Pending Adjustment of Status]

Thanks.

Re: LLC filing as S-Corp Eligibility on working with EAD

DavidD66 — Wed, 26 Feb 2025 15:19:16 GMT

You don't have to have a green card to be an S-Corp Shareholder. If the owner of the single member LLC qualifies a resident under the Internal Revenue Code an S-Corp election can be made.

According the AICPA publication "The Tax Advisor":

One requirement for an S corporation is that it cannot have a nonresident alien as a shareholder (IRC Sec. 1361(b)(1)(C)). IRC Sec. 7701(b)(1)(B) defines a nonresident alien as an individual who is neither a citizen nor a resident of the United States within the meaning of IRC Sec. 7701(b)(1)(A). IRC Sec. 7701(b)(1)(A) provides that an alien individual is treated as a resident of the United States with respect to any calendar year if (and only if) that individual either

(1) is a lawful permanent resident of the United States at any time during that calendar year (the green card test);

(2) meets the substantial-presence test of Sec. IRC 7701(b)(3); or

(3) makes the first-year election provided in Sec. IRC 7701(b)(4).

Re: LLC filing as S-Corp Eligibility on working with EAD

pk — Wed, 26 Feb 2025 17:37:32 GMT

@scsvel , thank you very much for your answers . Based on these and generally agreeing with my colleague @DavidD66 , YES you can indeed file as S-Corp ( i.e. single member LLC electing to file a S-Corp ). I am assuming that what you are trying to achieve is to have the S-Corp employ you ( as sole employee) and you become a W-2 employee rather than file a Schedule-C ( dis-regarded entity ). Note though that there are wage / remuneration requirements as an owner/employee of S-Corp.

I am sure you have gone through the rules and regs. of an LLC vs. Corp ( S in your case ), with an attorney -- here is a very simple comparison -- S Corporation vs. LLC: Differences, Benefits | Wolters Kluwer

Please also consider having an awareness of code sections 1361 through 1363

Is there more I can do for you ?

Namaste ji

Re: LLC filing as S-Corp Eligibility on working with EAD

scsvel — Wed, 26 Feb 2025 19:24:50 GMT

@pk @DavidD66 Just to confirm some related things.

Can I file form 8832 and 2553 now to change the election for tax year 2024 and file taxes as S-Corp for 2024? or Only I can do it for 2025 when I file next year?

Re: LLC filing as S-Corp Eligibility on working with EAD

RobertB4444 — Wed, 05 Mar 2025 14:02:54 GMT

You can file 2553 and 8832 with your timely filed 1120-S for 2024. You need to get it all submitted by March 15th and you may have to mail in the return with signatures on all of the forms.

@scsvel