Arkansas · LLC tax election
Arkansas LLC: S corp or C corp?
Arkansas gives the choice to the IRS and then follows it, so the comparison is mostly about the graduated corporate scale.
See Arkansas at a glanceShort answer
Arkansas follows your federal S election, so you choose S or C once. An S corp files Form AR1100S and passes income to you, while a C corp pays graduated rates from 1.0% to 4.3%. The top corporate rate only applies above $11,000 of net income.
Last checked .Arkansas at a glance
| Question | Arkansas |
|---|---|
| S election recognized? | Yes, Arkansas follows the federal election1 |
| Separate state form and deadline | No separate state form2 |
| Tax the S corp itself pays | None at the entity level3 |
| C corp rate and minimum | 1% to 4.3%, graduated4 |
| Entity tax on a default LLC | $150 a year5 |
| Personal income tax | Yes, on wages and pass-through income6 |
What is different about Arkansas?
Arkansas has an unusual rule worth knowing. For tax years beginning in 2018 or later, a federal S corporation must file as an Arkansas S corporation. You are no longer allowed to file as a C corporation at the state level if you are an S corporation federally, and the old Arkansas Form AR1103 election is gone. That leaves one real state-level difference to weigh. C corporations pay graduated rates from 1.0% up to 4.3%, and the 4.3% rate only starts above $11,000 of net income. An S corporation passes income through to you instead. Arkansas also lets S corps elect the pass-through entity tax.
Does Arkansas recognize a federal S corp election?
Arkansas follows your federal S election and does not offer a choice at the state level. A federal S corporation must file as an Arkansas S corporation, using Form AR1100S, due the 15th day of the 4th month after the tax year closes. The old Form AR1103 state election applied only to tax years before 2018. The S corporation still pays Arkansas tax on built-in gains at 4.3%. A Sub-S corporation that elects the pass-through entity tax does not file the AR1100S.
Does my LLC need a separate Arkansas election or form?
Arkansas used to require Form AR1103 for tax years before 2018; for 2018 and later the federal S election carries over and you file Form AR1100S.2
What does Arkansas tax an S corp or LLC at the entity level?
Is a Arkansas LLC taxed as a C corp ever better?
An Arkansas C corporation pays graduated corporate income tax from 1.0% to 4.3%: 1.0% on the first $3,000, 2.0% on the next $3,000, 3.0% on the next $5,000 and 4.3% on net income above $11,000. Act 1 and Act 4 of the 2024 Second Extraordinary Session set the 4.3% top rate for tax years beginning in 2024 and later. Dividends are then taxed on your personal return at Arkansas's graduated individual rates.
Run your Arkansas numbers
In Arkansas the corporate scale is low, topping out at 4.3% above $11,000, so an S election saves less state tax here than in many states. The S corp saves the second layer on dividends and some payroll tax. Weigh those against payroll provider and filing costs once profit clears a reasonable owner salary.
Result
How much would a Arkansas LLC owner save as an S corp?
| Taxed as | At $80,000 profit | At $150,000 profit |
|---|---|---|
| Default LLC | $11,304self-employment tax $11,304 + Arkansas LLC tax $0 | $21,194self-employment tax $21,194 + Arkansas LLC tax $0 |
| S corp | $9,344payroll tax $7,344 + Arkansas S corp tax $0 + $2,000 payroll and prep | $15,770payroll tax $13,770 + Arkansas S corp tax $0 + $2,000 payroll and prep |
| C corp | $16,967payroll tax $7,344 + Arkansas tax $1,143 + federal $6,480 + $2,000 payroll and prep | $30,224payroll tax $13,770 + Arkansas tax $2,347 + federal $12,107 + $2,000 payroll and prep |
Assumes a 60% salary8 and a single filer. Income tax is left out. C corp dividends are taxed again. Arkansas's $150 LLC franchise tax stays due after you elect, so it is the same in all three and left out.
When is the Form 2553 deadline for a Arkansas LLC, and what if I miss it?
Late relief: federal steps, deadline guide.
What to do next
How to start one, or have us form it from $123.75.
Registered agent $74.25/yr, annual report.
LLC vs S corp guide, election deadline, Form 2553 filed for $165.
More on Arkansas: How to start a Arkansas LLC · How to start a Arkansas corporation · Arkansas LLC cost · Arkansas annual report · Annual report late fees by state
File the S-Corp Election for your Arkansas LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
Does Arkansas recognize the federal S election?
Yes, and it makes you follow it. For tax years beginning on or after January 1, 2018, a federal S corporation must file as an Arkansas S corporation. It can no longer file as a C corporation at the state level.
What is the Arkansas corporate income tax rate?
Graduated from 1.0% to 4.3%. The first $3,000 is taxed at 1.0%, the next $3,000 at 2.0%, the next $5,000 at 3.0% and income above $11,000 at 4.3%.
Do I need Form AR1103 to be an S corporation in Arkansas?
No. Form AR1103 was required for tax years beginning before January 1, 2018. For 2018 and later, you make the federal election and file Form AR1100S.
When is Arkansas Form AR1100S due?
On the 15th day of the 4th month after the tax year closes, which is April 15 for calendar-year filers. S corps that elect the pass-through entity tax should not file it.
Does Arkansas have a pass-through entity tax?
Yes. Arkansas lets S corporations elect the pass-through entity tax; a Sub-S corporation that does so does not file Form AR1100S. The rate was not verified here.
Sources 9 links, checked Nov 6, 2026
- Arkansas recognizes the federal S election and, since 2018, requires a federal S corporation to file as an Arkansas S corporation. dfa.arkansas.gov, checked Nov 6, 2026
- Arkansas used to require Form AR1103 for tax years before 2018; for 2018 and later the federal S election carries over and you file Form AR1100S. dfa.arkansas.gov, checked Nov 6, 2026
- An Arkansas S corporation files Form AR1100S and passes income to shareholders; it also pays tax on built-in gains at 4.3% (Schedule D). dfa.arkansas.gov, checked Nov 6, 2026
- An Arkansas C corporation pays graduated rates from 1.0% to 4.3%: 1.0% on the first $3,000 of net income, 2.0% on the second $3,000, 3.0% on the next $5,000 and 4.3% on net income exceeding $11,000. dfa.arkansas.gov, checked Nov 6, 2026
- An Arkansas LLC pays a flat $150 annual franchise tax to the Secretary of State, due on or before May 1. sos.arkansas.gov, checked Nov 6, 2026
- Arkansas taxes individual income at graduated rates; the 2025 DFA bracket table tops out at 3.90% in the range it lists. dfa.arkansas.gov, checked Nov 6, 2026
- IRS: Form 1120 instructions, C corp rate irs.gov, checked Nov 6, 2026
- IRS: S corp reasonable compensation irs.gov, checked Nov 6, 2026
- IRS: Form 2553 instructions irs.gov, checked Nov 6, 2026
Last verified Nov 6, 2026.
This page explains the rules; it is not tax advice. Run your numbers with a CPA or enrolled agent before you elect.
Last verified Nov 6, 2026.