Guide · 2026 rules
LLC taxed as an S corp: same LLC, new tax
You don’t have to turn your LLC into a corporation to be taxed as an S corporation. The LLC files one IRS form and keeps everything else its state set up. Here is how that works, and what changes and what stays the same for a one-owner LLC.
In short
- An LLC elects S status by filing Form 2553. It does not also file Form 8832.
- The LLC stays an LLC under state law: same liability protection, same operating agreement, same state filings.
- What changes is tax: you go on payroll, the business files Form 1120-S, and you get a K-1.
- A few places don’t follow the federal election, so check your state.
How an LLC gets S-corporation tax treatment
By default the IRS treats a one-owner LLC as part of its owner for income tax. To be taxed as an S corporation, the LLC files Form 2553. An LLC that files a valid Form 2553 is treated as a corporation from the date the election takes effect, and it does not also file Form 8832.
To take effect for a year, Form 2553 is due no later than 2 months and 15 days after the year begins: March 15 for a calendar year. Electing S corp status walks through the form and late relief.
What stays the same
- The LLC itself. The election changes how the IRS taxes the business, not the structure your state set up. It is still an LLC with your state.
- Liability protection. The LLC protects your personal assets in most instances, as before.
- The operating agreement and state filings. The LLC’s annual report or fee follows the LLC, though in some states the tax election changes a state tax or fee.
What changes
- You go on payroll. You take a reasonable salary with taxes withheld, and the rest of the profit can come out as distributions. How to pay yourself explains the split.
- A second return. The business files Form 1120-S each year and gives you a Schedule K-1. Form 1120-S covers it.
- Self-employment tax. Social Security and Medicare apply to your salary, not your whole profit. That is where the saving comes from.
- 1099s from clients. Payments to an LLC taxed as an S corporation generally don’t need a Form 1099-NEC. Does an S corp get a 1099? explains the exceptions.
Check your state
Most states follow the federal S election automatically. A few don’t. New York requires its own state election on Form CT-6, and New York City and Washington, DC, do not recognize the election at all. California replaces its LLC tax and fee with its S-corporation tax: California LLC fee explains that one. The calculator applies each state’s rules.
Is it worth it?
It depends on your profit, your salary and your state. Below a certain profit, payroll and the second return cost more than the election saves. What is an S corp? explains the trade, and the calculator runs it with your numbers.
Sources
Sources: 13 official pages
- IRS, Limited Liability Company (LLC) (page last reviewed 10-Oct-2026)
- IRS, S corporations (page last reviewed 11-Jun-2026)
- Instructions for Form 2553 (Rev. December 2020), Purpose of Form
- Rev. Proc. 2013-30, section 1
- U.S. Small Business Administration, Choose a business structure
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026)
- NY Tax Law §660(a); Form CT-3-S-I (2025)
- Form CT-6-I (12/20), When to make the election
- NYC Department of Finance, General Corporation Tax page
- DC OTR, 2025 D-20 Corporation Franchise Tax Forms and Instructions (revised 11/2025)
- FTB, Limited liability company (LLC treated as a corporation)
- R&TC 17941(d)
- Instructions for Form 1120-S (2025), When To File
Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.
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