Can a corporation get a tax refund?
Corporations and tax refunds, do the two mix?
Do the two mix? Yes, but it depends on the business and situation. The tax circumstances are a large factor. C-corporations are the ones that usually get a tax refund.
The reason c-corps get the refund is due to the exemption status. C-corps are taxed separately from the ownership. The owners have a separate tax exemption under the Chapter C code for the IRS.
Say the C-corp pays more taxes during the year. Sometimes the company overpays when it comes to their payroll and sales taxes. That will qualify the company for a refund, depending on how much they overpaid.
How do I know if I get one or not?
The first thing you need to do is look at the type of corporation your company is listed under the tax code.
There are certain situations when the refund will pass through to the owner.
1) Are you the sole owner of the company? The listings will appear under the Schedule C. You will get a 1040 tax form in the mail and online. I suggest you double-check with your accountant to make sure you will get a refund.
2) Do you have a partnership with someone? The partnership must include at least two or more people. The partners get a K-1 form. You will get a 1065 form. You might be eligible for a refund based on what you report on the forms.
3) You might be eligible if you have an LLC partnership, for which you will also get a 1040 form.
4) The other eligibility requirement is with an S-Corporation. You will get an 1120S form, and the other people will get a K-1.
These are examples of company structures for which you could be eligible for a refund. I encourage you to go online and check out the tax code for additional information.