State guide · Mississippi · 2026 rules
S corporation in Mississippi: what the election changes
Mississippi taxes the S corporation’s income on your own return, as it does today. The election adds a small franchise tax and state payroll costs on your salary.
Choose a state and enter your profit and salary to see the comparison.
The state
Mississippi classifies an LLC the way the IRS does, and no separate state S election form was found. An S corporation pays no Mississippi income tax; you pay it on your individual return, as you do today. The S corporation files Form 84-105.
Every S corporation pays Mississippi’s corporate franchise tax. For tax years beginning in 2026 it is $0.50 per $1,000 of capital employed in Mississippi above $100,000, with a $25 minimum. A sole proprietor or one-owner LLC that is not taxed as a corporation pays none, so a business with under $100,000 of capital adds the $25 minimum. The franchise tax law is repealed effective January 1, 2028.
A Mississippi LLC’s annual report has no fee. An LLC that elects stays an LLC and still pays no annual report fee.
Payroll taxes on your salary
Unemployment insurance: a new employer pays 1.0% in its first year, 1.1% in its second and 1.2% after that, on the first $14,000 of wages. Corporate officers who work for wages are employees. A sole proprietor is not an employee of their own business, so the election starts this tax.
A Workforce Investment and Training contribution of 0.20% is added on the same $14,000. It is 0.16% in years the 0.04% Mississippi Works part is not collected.
The optional pass-through entity tax
An S corporation can elect to pay Mississippi tax itself on Form 84-381. The entity pays 0% on the first $5,000, 4% on the next $5,000 and 5% above $10,000, while the same income on your own return is taxed at 4% for 2026. You claim a credit for your share. 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 | $776 lower |
| $120,000 / $60,000 | $3,177 lower |
| $200,000 / $90,000 | $7,958 lower |
Starting payroll in Mississippi
Register for state income tax withholding with the Mississippi Department of Revenue through its Taxpayer Access Point, and for unemployment insurance with the Mississippi Department of Employment Security.
Other states
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Washington, DC
- West Virginia
- Wisconsin
- Wyoming
Sources
- Mississippi Department of Revenue, Business Tax FAQs (Corporate Income and Franchise Tax)
- Mississippi Secretary of State, Services & Fees Schedule (revised October 2024)
- Mississippi Department of Revenue, Updated Electing Pass-Through Entity FAQs (March 4, 2024)
- HB 1691 (2022 Reg. Sess.), s. 1(1)(a) (EPTE election)
- Miss. Code Ann. s. 71-5-353(1) and s. 71-5-355 (as reprinted in the MDES Employment Security Law and Regulations, Feb. 2024)
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.