How are LLCs Taxed in North Carolina: A Review of LLC Tax Classifications

Question:

How are LLCs taxed in North Carolina?  How to file a NC LLC tax return?

Answer:

A Limited Liability Company (LLC) is a type of business structure created by state law.  Owners of LLCs are called members.  Depending on elections made by the members and the number of members, the IRS will classify a LLC as either a corporation, partnership, or as a disregarded entity.  Generally, the IRS will treat LLCs with at least two members as a partnership unless an election is made to be treated as a corporation (either S Corporation or C Corporation).  Similarly, the IRS will treat an LLC with only one member as a disregarded entity unless an election is made to be treated as a corporation.  Elections are made by filing IRS Form 8832, Entity Classification Election.

North Carolina follows the classification as determined by IRS rules.  Generally, no separate forms are required to be filed to establish the tax classification of LLCs for North Carolina income tax purposes.

LLC tax returns are filed on one of many different forms.  See article How to File a North Carolina LLC Tax Return for the specific forms.

Need additional information about North Carolina LLCs? Return to the North Carolina LLC Tax Center for more questions and answers.

Simply Taxes, LLC is a local year-round tax preparation firm with an office located in North Raleigh.  Our Raleigh accountants are ready to assist you with your questions pertaining to your taxes!

Related Articles

How to File a North Carolina LLC Tax Return

Sources

IRS Form 8832, Entity Classification Election

Publication 3402 – Taxation of Limited Liability Company

The information contained within this article is for general guidance only. As such, it should not be used as a substitute for consulting with professional accounting, tax, legal or other competent advisers. 

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