State guide · Louisiana · 2026 rules

S corporation in Louisiana: what the election changes

From 2026 Louisiana treats an S corporation the way the IRS does: the owner pays the tax, not the business. The main state change is unemployment tax on your salary.

Updated October 24, 202614 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

Louisiana follows the federal S election; there is no state form to file. For tax periods that begin on or after January 1, 2026, an S corporation pays no Louisiana income tax. It files Form CIT-620 as an information return.

The corporation franchise tax is repealed for periods that begin on or after January 1, 2026. Before 2026 it applied to an S corporation; now it does not.

You pay Louisiana’s flat 3% individual income tax on the business income either way. An LLC stays an LLC with the Secretary of State, so no state fee changes because you elect.

Unemployment tax on your salary

Louisiana taxes the first $7,000 of each worker’s wages in 2026. A new employer pays the average rate for its industry, so there is no single new-employer rate. The 2026 rates run from 0.09% to 6.20%.

Louisiana law covers services performed for wages and lists no exclusion for a corporate officer or owner, so your salary is in the base. Enter your rate in the calculator; the worked examples leave this tax out.

The optional pass-through entity tax

An S corporation can elect to pay Louisiana tax itself at the 3% individual rate, on Form R-6980. You then leave that income off your own Louisiana return. The calculator leaves it out.

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	$935 lower
$120,000 / $60,000	$3,336 lower
$200,000 / $90,000	$8,117 lower

Starting payroll in Louisiana

Register for state income tax withholding with the Louisiana Department of Revenue through LaTAP, and for unemployment insurance with the Louisiana Workforce Commission.

New hire paperwork for Louisiana

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