State guide · New York · 2026 rules
S corporation in New York: what the election changes
New York is two decisions in one. The state honors the S election once you file its own form. New York City does not honor it at all, so a city business swaps one city tax for another.
Choose a state and enter your profit and salary to see the comparison.
The state: a separate election and a fixed minimum
New York needs its own election, Form CT-6, with state approval. A New York S corporation then pays only a fixed dollar minimum set by New York receipts: $25 at $100,000 or less, $50 up to $250,000, $175 up to $500,000 and $300 up to $1 million.
A single-member LLC pays a $25 filing fee (Form IT-204-LL) today. Once it elects to be taxed as a corporation it stops filing IT-204-LL and pays the fixed dollar minimum instead.
New York City: UBT out, General Corporation Tax in
Today a sole proprietor or single-member LLC doing business in the city pays the Unincorporated Business Tax: 4% of income after an allowance for the owner’s services (20% of income or $10,000, whichever is lower) and a $5,000 exemption, with a full credit when the tax is $3,400 or less and a partial credit up to $5,400.
New York City does not recognize the S election. The S corporation pays the General Corporation Tax: the largest of 8.85% of income allocated to the city, a capital measure, 8.85% of 15% of income plus shareholder pay over a $40,000 exclusion, or a fixed dollar minimum. That is why the election saves far less in the city.
A city resident may also owe city personal income tax on the same profit. The calculator does not include it.
Payroll taxes on your salary
Unemployment insurance: 4.1% in total for a new employer on the first $17,600 of wages in 2026. New York treats officers of all corporations, including S corporations, as employees.
Paid Family Leave: 0.432% of wages, up to $411.91 a year. Disability Benefits: the employee pays 0.5% of wages, up to $0.60 a week; the employer pays the rest of the insurance premium.
The commuter transportation tax (MCTMT) charges self-employed people 0.60% in New York City and 0.34% in the suburban district on self-employment earnings above $150,000 for 2026. An employer owes it only above $312,500 of district payroll a quarter, so the election takes a one-owner business out of it.
The optional pass-through entity taxes
New York’s pass-through entity tax starts at 6.85%, and New York City’s is 3.876% for an S corporation whose shareholders are all city taxpayers. Both are elected online between January 1 and March 15. The calculator leaves them 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 | Outside the city | In New York City |
|---|---|---|
| $80,000 / $45,000 | $115 lower | $2,035 higher |
| $120,000 / $60,000 | $2,431 lower | $321 lower |
| $200,000 / $90,000 | $7,081 lower | $6,919 lower |
Starting payroll in New York
Register once through NY Business Express: it covers unemployment insurance, wage reporting and state income tax withholding.
File Form CT-6 for the state S election, and Form CT-3-S each year.
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
- 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
- Form IT-204-LL-I, Filing fee calculation
- NY Tax Law §862 (Article 24-A)
- NY DTF, Pass-through entity tax (PTET)
- NY Tax Law §869 (Article 24-B)
- NY DTF, New York City pass-through entity tax (NYC PTET)
- NY DOL, NYS-45 Quarterly Reporting
- NY DOL, Unemployment Insurance Rate Information
- NYS-50 Employer’s Guide, Covered employment
- NY DFS, PFL premium rate decision for 2026
- NY Workers’ Compensation Law §209(3)(a)
- NY WCB, Is Disability and Paid Family Leave Coverage Required?
- NY DTF, NYC, Yonkers, and MCTMT (residents)
- NY DTF, Employers: MCTMT
- Form IT-201-I (2025), lines 54a/54b
- NY Tax Law §801(a)(3)
- NYC DOF, Unincorporated Business Tax page
- NYC DOF, General Corporation Tax Rates
- Instructions for Form NYC-202S (2025), Line 2
- Instructions for Form NYC-4S (2025), Alternative tax worksheet, line 4
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.