State guide · Rhode Island · 2026 rules

S corporation in Rhode Island: what the election changes

For an LLC, Rhode Island’s $400 yearly charge stays $400 after the election. The changes are payroll taxes: unemployment tax and disability insurance on your salary.

Updated October 24, 20268 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

Rhode Island follows the federal S election. An S corporation pays no Rhode Island corporate income tax, but it owes the $400 annual minimum business corporation tax on Form RI-1120S.

A single-member LLC already pays the same $400 as an annual charge on Form RI-1065. After the election the amount stays the same; only the form changes. A sole proprietor with no LLC pays no entity charge today; the $400 starts when you form an entity.

Rhode Island has no city income taxes.

Payroll taxes on your salary

Unemployment insurance: 1.21% for a new employer on the first $30,800 of wages in 2026. The rate includes the 0.21% Job Development Assessment. The business pays it.

The law leaves out sole proprietors and a single-member LLC that files as a sole proprietor. An LLC that elects files as a corporation, so it falls outside that rule, and the calculator counts your salary as covered.

Temporary Disability Insurance and Temporary Caregiver Insurance: 1.1% of wages up to $100,000 in 2026, taken out of your pay. The most you pay is $1,100 a year. As a sole proprietor you are outside it.

The optional pass-through entity tax

Rhode Island’s pass-through entity tax is 5.99% of net income, and the owner gets a state tax credit of 90% of the tax paid. A single-member LLC or a sole proprietorship can elect it too, so the S election does not change whether you can use it. 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	$133 lower
$120,000 / $60,000	$2,369 lower
$200,000 / $90,000	$6,819 lower

Starting payroll in Rhode Island

Register once through the Rhode Island Business Application and Registration. It opens the income tax withholding account with the Division of Taxation and the unemployment insurance account with the Department of Labor and Training, which also covers disability insurance and the Job Development Fund tax.

New hire paperwork for Rhode Island

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