Connecticut · LLC tax election
Connecticut LLC: S corp or C corp?
Connecticut's wrinkle is an optional entity-level tax for pass-throughs, not a penalty on them.
See Connecticut at a glanceShort answer
In Connecticut an S election takes the corporation business tax off the entity: S corporations are pass-throughs, with a composite payment possible for nonresident members. A C corp pays 7.5% of net income with a $250 minimum, and larger filers may face a 10% surtax.
Last checked .Connecticut at a glance
| Question | Connecticut |
|---|---|
| S election recognized? | Yes, Connecticut 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 | 7.5% flat, minimum $2504 |
| Entity tax on a default LLC | None for a default LLC5 |
| Personal income tax | Yes, on wages and pass-through income6 |
What is different about Connecticut?
Connecticut sorts the question into three boxes. The corporation business tax hits C corporations at 7.5% of net income, with a $250 minimum, and a 10% surtax that the state extended again. S corporations sit outside it: DRS says they are not subject to the corporation business tax and are treated as pass-through entities. The third box is the odd one. Pass-through entities can elect Connecticut's pass-through entity tax, 6.99% of PE income subject to tax, filed on Form CT-PET. That election exists so owners can get a federal deduction for state tax paid. It is a choice, not a charge.
Does Connecticut recognize a federal S corp election?
Connecticut treats an S corporation as a pass-through entity, not as a corporation business tax payer. The S corp files Form CT-1065/CT-1120SI by the 15th day of the 4th month after year-end, and it may have to make a composite income tax payment for nonresident noncorporate members. There is no separate Connecticut S election form. Connecticut also lets pass-through entities elect the pass-through entity tax at 6.99% on Form CT-PET.
Does my LLC need a separate Connecticut election or form?
Connecticut uses no separate S election; the pass-through entity files Form CT-1065/CT-1120SI by the 15th day of the 4th month after year-end.2
What does Connecticut tax an S corp or LLC at the entity level?
- A Connecticut S corporation owes no corporation business tax, but may have to make a composite income tax payment for nonresident members.3
- Connecticut no longer charges LLCs a Business Entity Tax; it ended for any tax period beginning after 2018.5
- The 10% surtax on the corporation business tax was extended three additional years.7
Is a Connecticut LLC taxed as a C corp ever better?
A Connecticut C corporation pays the corporation business tax at 7.5% of net income, with a $250 minimum. DRS notes that a 10% surtax was extended three additional years. A C corp also leaves you with a second layer of tax, because dividends are taxed on your personal return. For small LLCs electing C status, the 7.5% and the minimum are what show up.
Run your Connecticut numbers
In Connecticut the S election pays when your profit is high enough that skipping the 7.5% corporate tax and the dividend layer outweighs payroll costs. The pass-through entity tax at 6.99% is optional and mainly helps owners with high federal itemized deductions, so it is not a reason to elect S on its own.
Result
How much would a Connecticut 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 + Connecticut LLC tax $0 | $21,194self-employment tax $21,194 + Connecticut LLC tax $0 |
| S corp | $9,344payroll tax $7,344 + Connecticut S corp tax $0 + $2,000 payroll and prep | $15,770payroll tax $13,770 + Connecticut S corp tax $0 + $2,000 payroll and prep |
| C corp | $17,960payroll tax $7,344 + Connecticut tax $2,400 + federal $6,216 + $2,000 payroll and prep | $31,925payroll tax $13,770 + Connecticut tax $4,500 + federal $11,655 + $2,000 payroll and prep |
Assumes a 60% salary9 and a single filer. Income tax is left out. C corp dividends are taxed again.
When is the Form 2553 deadline for a Connecticut 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 Connecticut: How to start a Connecticut LLC · How to start a Connecticut corporation · Connecticut LLC cost · Connecticut annual report · Annual report late fees by state
File the S-Corp Election for your Connecticut LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
Does Connecticut tax S corporations?
Not under the corporation business tax. DRS says S corporations are not subject to it and are treated as pass-through entities. They file Form CT-1065/CT-1120SI.
What is the Connecticut corporation business tax rate?
7.5% of net income, with a $250 minimum, according to DRS. A 10% surtax was extended three additional years.
What is the Connecticut pass-through entity tax?
An elective tax: 6.99% of PE income subject to tax, reported on Form CT-PET. It is for partnerships, LLCs and S corporations.
When is the Connecticut S corporation return due?
Form CT-1065/CT-1120SI is due on or before the fifteenth day of the fourth month after the close of the taxable year.
Do nonresident shareholders owe Connecticut tax on S corp income?
They can. DRS says S corporations may have to make a composite income tax payment on behalf of nonresident noncorporate members.
Sources 10 links, checked Nov 6, 2026
- Connecticut does not tax an S corporation under the corporation business tax; it treats it as a pass-through entity. portal.ct.gov, checked Nov 6, 2026
- Connecticut uses no separate S election; the pass-through entity files Form CT-1065/CT-1120SI by the 15th day of the 4th month after year-end. portal.ct.gov, checked Nov 6, 2026
- A Connecticut S corporation owes no corporation business tax, but may have to make a composite income tax payment for nonresident members. portal.ct.gov, checked Nov 6, 2026
- A Connecticut C corporation pays 7.5% of net income (a capital base tax applies if larger), with a $250 minimum. portal.ct.gov, checked Nov 6, 2026
- Connecticut no longer charges LLCs a Business Entity Tax; it ended for any tax period beginning after 2018. portal.ct.gov, checked Nov 6, 2026
- Connecticut taxes the income of S corporation members; nonresident members can be covered by composite income tax payments. portal.ct.gov, checked Nov 6, 2026
- The 10% surtax on the corporation business tax was extended three additional years. portal.ct.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.