Pass Through Entities
A pass-through entity is a business whose owners claim the income on their own income tax returns based on their share of profits or losses.
Pass-through entities include:
- Partnerships
- S corporations
- Limited Liability Companies (LLC) taxed as partnerships or S corporations
- Disregarded Entities, such as single-member LLCs (SMLLCs)
Pass-through entities generally do not pay federal income tax. However, a pass-through entity may incur a Montana tax liability.
The pass-through entity may elect to pay pass-through entity tax or composite tax.