Terry53029
Level 15
Level 15

S-Corp is a pass through entity, so it pays no tax on income. You would allocate income from K1 to each state. Some states allow a SALT cap workaround may enable them to indirectly deduct state and local taxes they've paid beyond the $10,000 SALT cap. If you elect that option (if available in your states), then you have to allocate on the 1120S.