State guide · New Hampshire · 2026 rules

S corporation in New Hampshire: what the election changes

In New Hampshire the business pays the state tax whether or not you elect. The election changes how your pay is deducted and brings unemployment tax on your salary.

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.

Business taxes apply before and after

New Hampshire does not pass S-corporation income through to the owner. The Business Profits Tax (7.5%) and the Business Enterprise Tax (0.55%) apply to a sole proprietorship, an LLC and an S corporation alike. The enterprise tax you pay is a credit against the profits tax.

Today a sole proprietor deducts fair and reasonable pay for the owner’s own work from business profits, or up to $75,000 without proof. After the election the S corporation deducts the salary it actually pays you.

The enterprise tax falls on pay, interest and distributions. For an S corporation that means your salary and the distributions it pays. For a sole proprietor it means the owner’s pay deduction plus self-employment earnings.

A profits tax return is due only above $109,000 of gross business income. An enterprise tax return is due only above $298,000 of gross receipts or tax base. The S corporation files Form NH-1120 with DP-120 and DP-9; a proprietorship files NH-1040.

No tax on wages or dividends

New Hampshire has no tax on wage income, so there is no state withholding. The Interest and Dividends Tax, which once reached S-corporation distributions, was repealed effective January 1, 2025. There is no optional pass-through entity tax.

An LLC that elects stays an LLC with the Secretary of State and keeps paying the $100 annual report fee.

Unemployment tax on your salary

A sole proprietor has no unemployment account for their own pay. After the election your salary is covered: the officer exclusion applies only when the officer is paid no wages.

A new employer pays 1.7% for 2026 (2.7% less a 1.0% fund balance reduction) on the first $14,000 of wages.

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	$739 lower
$120,000 / $60,000	$2,595 lower
$200,000 / $90,000	$9,371 lower

Starting payroll in New Hampshire

New hire paperwork for New Hampshire

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