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Maverick, Attorney
Category: Business Law
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Experience:  20 years of professional experience
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Can you make an S-corp Federal Election for a CA Professional

Resolved Question:

Can you make an S-corp Federal Election for a CA Professional Corp?

I am trying to decide whether to incorporate here in CA. Given my profession, I must file as a professional Corporation. However the only reason I can see to do it is if I can make a federal S-corp election.

However, for the life of me I am unable to find out specifically if in CA you can do such a thing.

I would like an answer from CA barred Attorney or a CPA from CA.
Submitted: 6 years ago.
Category: Business Law
Expert:  Maverick replied 6 years ago.

Welcome to Just Answer! My name isXXXXX very much enjoy what I do and I hope that you will benefit from this information.


I am not a CA attorney. So, if you are not satisfied with my answer, please let me know and I will release the question back to the main board.


CA personal service corporations provide services in the fields of health, law, engineering, architecture, accounting, actuarial science, or consulting. These professional corporations are allowed to file for S Corporation status and this election allows for the entity to have pass-through tax treatment.


Thus, if the S corp election is made, the personal service S - Corp is not subject to the flat 35% income tax rate. With an S -Corp, the corporate profits and losses are passed through to the shareholder-employees who will pay ordinary personal income tax.


Under CA law, all corporations (including professional corporations) are initially filed and treated as C corps unless and until a S corp election is made. A California corporation that has elected S tax treatment by filing IRS Form 2553 is commonly referred to as an S - Corp.


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