Form 1120-S - No Self Employment Tax on S-Corporation Income
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Per IRS Instructions for Form 1120-S U.S. Income Tax Return for an S Corporation, on page 21:

Schedules K and K-1 (General Instructions)

Purpose of Schedules The corporation is liable for taxes on lines 22a, 22b, and 22c on page 1 of Form 1120-S. Shareholders are liable for tax on their shares of the corporation's income (reduced by any taxes paid by the corporation on income). Shareholders must include their share of the income on their tax return whether or not it is distributed to them. Unlike most partnership income, S corporation income isn't self-employment income and isn't subject to self-employment tax.


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