State guide · Alaska · 2026 rules

S corporation in Alaska: what the election changes

In Alaska the S-corp decision is all federal. The state taxes neither you nor the S corporation, and an LLC owner’s salary is outside unemployment insurance.

Updated October 24, 20269 official sources

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You’ll need: last year’s Schedule C (line 31) and the W-2 from any job you also hold. Everything else starts at a typical value you can change.

State where the business is Each state treats the election differently. The check shows only the questions that matter there.

Net profit for the year, before paying yourself Your business's profit after expenses. Money you take out for yourself does not lower it.

Where do I find this?

Schedule C, line 31 (“Net profit or (loss)”) on last year’s return.

For this year: sales minus business expenses so far, scaled to a full year. Owner draws are not an expense.

Salary you would pay yourself as an S corporation What you would pay yourself through payroll. The IRS expects a reasonable salary for the work you do.

Where do I find this?

No form shows this yet: you choose it. It should be about what you would pay someone else to do your work.

The salary finder just below shows what employees in your job earn in your state or metro area. What the IRS looks at.

Salary finder: what people in your job earn (BLS)

Your job Pick the job closest to what you do most of the week.

Area Pick your metro area if it is listed. Pay varies by area.

Another job I also earn W-2 wages from a job outside this business

Typical values: change them if you know yours

Payroll service, per year typical value Published one-person prices: $492 to $684 a year (October 2026).

Where do I find this?

Your payroll provider’s price page or quote, for one employee: you. Published prices compared.

Extra tax-prep cost for the S-corp return typical value A survey average: the fee for Form 1120-S minus the fee for Schedule C (2020 fees).

Where do I find this?

Ask your preparer what a Form 1120-S (the S corporation’s own return) would cost, then subtract what you pay now for Schedule C.

Your top federal income tax rate Not sure? Keep 22%. It changes line 5 only.

Where do I find this?

Your taxable income is on Form 1040, line 15. Find the rate for that income and your filing status in the IRS rates and brackets table.

Filing status Changes the result only above $200,000 of earnings ($250,000 if married filing jointly, $125,000 if married filing separately).

Where do I find this?

The box checked under Filing Status at the top of your Form 1040.

Choose a state and enter your profit and salary to see the comparison.

The state

Alaska has no personal income tax. It follows the federal S election with no state form, and its corporate income tax does not reach an S corporation’s ordinary income. The election adds no state income tax to you or to the business.

An LLC that elects stays an LLC with the Division of Corporations. Its biennial report and business license do not change.

No unemployment tax on an LLC owner’s salary

Alaska does not cover an LLC member’s wages for unemployment insurance, even when the LLC is taxed as an S corporation, and coverage cannot be elected. The Department of Labor follows the entity you register with the state, not your federal tax election.

An Alaska corporation does not cover its executive officers either, but it can elect to cover them for at least two years.

For other workers, a new employer pays 1.00% and each employee pays 0.50%, on the first $54,200 of wages in 2026.

Worked examples

A single-member LLC owner, single filer, 22% federal bracket, default payroll and return costs. The figure is total tax and added costs as an S corporation compared with staying as you are.

Profit / salary	Statewide
$80,000 / $45,000	$623 lower
$120,000 / $60,000	$3,025 lower
$200,000 / $90,000	$7,805 lower

Starting payroll in Alaska

Alaska has no state income tax withholding. If you hire workers, register for unemployment insurance with the Alaska Department of Labor and Workforce Development. An LLC does not report its member’s wages.

New hire paperwork for Alaska

Other states

All state guides and the map

Sources

Federal figures: IRS Publication 15 (2026), Schedule SE and Form 2553 instructions. Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.

An estimate from public rules, not tax advice.

Ready to elect? See the Form 2553 steps.

Electing S corp status