Tax-exempt income is a Schedule K item for an S corporation.

Name: Tax-exempt income is a Schedule K item for an S corporation.
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Tax-exempt income is reported on Schedule K of the S corporation's tax return. This income is not subject to federal income tax, but it is still included in the S corporation's taxable income calculation for certain purposes, such as determining the allowable deduction for expenses related to tax-exempt income.

Tax-Exempt Income Is a Schedule K Item for an S