For the official instructions from New York on how to dissolve your S-Corporation, you can read them here: https://www.tax.ny.gov/bus/doingbus/tr125.htm
For a human translation of those instructions, here are the steps you need to follow:
- December of the year you want to end business: Officially stop using your S-Corp.
- Make sure no income is paid to the S-Corp EIN starting on January 1. You can start using your new EIN or SSN (i.e. not the S-Corp EIN).
- Pay out any remaining funds through payroll or a shareholder disbursement (aka direct transfer to you).
- Close out the bank account / company credit cards so you don't accidentally have any income or expenses occur the following year. Our goal is to cease all business activity so that a business tax return is not required for the next year.
- January 15 of the following year (deadline): File your final S-Corp tax return.
- Generally the same process as always, however we will mark the return as your "final tax return".
- NOTE: The return is due by January 15th if you are closing your S-Corp on December 31st. You can file for an extension, which gives you more time to file the paperwork, but you don't get more time to pay any balance due. So if you had a profit in your last year and think you'll owe, try to pay and file by January 15 to avoid any interest charges/penalties.
- Write a Dissolution Consent Letter: New York tax officials will notice the "final tax return" note and check to make sure all past tax returns have been filed and paid. If so, then they will automatically send you an official dissolution consent letter.
- Dissolution: Send the following three items to the address below:
- Dissolution Letter from Step 3 (officially named: Form TR-960, Consent to Dissolution of a Corporation)
- Fill out the Certificate of Dissolution
- Send a check for $60 payable to the New York Department of State:
NEW YORK DEPARTMENT OF STATE
DIVISION OF CORPORATIONS
ONE COMMERCE PLAZA
99 WASHINGTON AVE
ALBANY NY 12231
If you're based in California, here's a link to that state's instructions: https://www.ftb.ca.gov/about-ftb/newsroom/tax-news/may-2018/how-to-close-a-california-business-entity.html