Delaware · LLC tax election
Delaware LLC: S corp or C corp?
Delaware's famous franchise rules matter less for you than the flat $400 every LLC pays.
See Delaware at a glanceShort answer
In Delaware an S election removes the corporate income tax but not the $400 LLC tax. Delaware exempts qualified S corporations from income tax, and C corporations pay 8.7%. An LLC owes $400 a year no matter how it is taxed, so the election never removes that line.
Last checked .Delaware at a glance
| Question | Delaware |
|---|---|
| S election recognized? | Yes, Delaware 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 | 8.7% flat4 |
| Entity tax on a default LLC | $400 a year5 |
| Personal income tax | Yes, on wages and pass-through income6 |
What is different about Delaware?
Delaware advertises low-tax formation, and the details are worth reading. Every Delaware LLC pays a flat $400 yearly tax by June 1, with no annual report. That bill is the same if you are a default LLC, an LLC taxed as an S corp or an LLC taxed as a C corp. On the income tax side, the Division of Revenue exempts a qualified S corporation with a valid federal election, and an S corp with nonresident shareholders prepays their Delaware tax at 6.60%. A C corporation, or an LLC that elects corporate treatment, pays 8.7% of Delaware taxable income. If you live in Delaware, your personal rate runs up to 6.60%.
Does Delaware recognize a federal S corp election?
Delaware exempts a qualified S corporation from the corporation income tax if it has a valid federal S election. You file Form 1100S, the S Corporation Reconciliation and Shareholders Information Return, with your federal Form 1120S. If you have nonresident shareholders, the S corp prepays their Delaware personal income tax by multiplying their share of Delaware income by 6.60%. An LLC taxed as an S corp still pays the $400 LLC tax.
Does my LLC need a separate Delaware election or form?
Delaware has no separate S election; the S corporation files Form 1100S, the S Corporation Reconciliation and Shareholders Information Return, with its federal Form 1120S.2
What does Delaware tax an S corp or LLC at the entity level?
- A Delaware S corporation pays no corporate income tax, but it prepays tax for nonresident shareholders at 6.60%.3
- A Delaware LLC pays a $400 annual tax, due June 1, whether or not it makes money.5
- A Delaware corporation owes franchise tax, with a minimum of $175 under the authorized shares method.7
- An LLC that elects corporate treatment files a Delaware corporate income tax return.8
Is a Delaware LLC taxed as a C corp ever better?
A Delaware C corporation pays 8.7% of Delaware taxable income, per the Division of Revenue's 2024 instructions. An LLC that elects corporate status files the Delaware corporate income tax return. A Delaware corporation also owes franchise tax, with a $175 minimum under the authorized shares method. An LLC, even one taxed as a corporation, pays the $400 LLC tax. Dividends are taxed again on your personal return at up to 6.60%.
Run your Delaware numbers
In Delaware the S election pays when your profit is large enough that skipping the 8.7% corporate tax beats payroll costs. The $400 LLC tax is due whether you elect S, C or nothing, so it should not influence the choice. If your shareholders are nonresidents, remember the 6.60% prepayment.
Result
How much would a Delaware 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 + Delaware LLC tax $0 | $21,194self-employment tax $21,194 + Delaware LLC tax $0 |
| S corp | $9,344payroll tax $7,344 + Delaware S corp tax $0 + $2,000 payroll and prep | $15,770payroll tax $13,770 + Delaware S corp tax $0 + $2,000 payroll and prep |
| C corp | $18,263payroll tax $7,344 + Delaware tax $2,784 + federal $6,135 + $2,000 payroll and prep | $32,494payroll tax $13,770 + Delaware tax $5,220 + federal $11,504 + $2,000 payroll and prep |
Assumes a 60% salary10 and a single filer. Income tax is left out. C corp dividends are taxed again. Delaware's $400 annual LLC 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 Delaware 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 Delaware: How to start a Delaware LLC · How to start a Delaware corporation · Delaware LLC cost · Delaware annual report · Annual report late fees by state
File the S-Corp Election for your Delaware LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
Does Delaware tax S corporations?
No corporate income tax: Delaware exempts qualified S corporations with a valid federal election. But the S corp files Form 1100S and prepays 6.60% for nonresident shareholders.
What is the Delaware corporate income tax rate?
8.7% of Delaware taxable income, per the Division of Revenue's 2024 corporate instructions.
How much is the Delaware LLC annual tax?
$400, due on or before June 1. LLCs do not file an annual report with the Division of Corporations. Miss it and Delaware adds a $200 penalty plus interest.
Does my Delaware LLC still pay the $400 if it elects S corp status?
Yes. The tax applies to LLCs formed or registered in Delaware, and the Division of Corporations does not exempt LLCs taxed as S or C corporations.
What is the minimum Delaware franchise tax for a corporation?
$175 under the authorized shares method, according to the Division of Corporations. LLCs pay the $400 annual tax instead.
Sources 11 links, checked Nov 6, 2026
- Delaware exempts qualified S corporations from the corporation income tax if they hold a valid federal S election. revenuefiles.delaware.gov, checked Nov 6, 2026
- Delaware has no separate S election; the S corporation files Form 1100S, the S Corporation Reconciliation and Shareholders Information Return, with its federal Form 1120S. revenuefiles.delaware.gov, checked Nov 6, 2026
- A Delaware S corporation pays no corporate income tax, but it prepays tax for nonresident shareholders at 6.60%. revenuefiles.delaware.gov, checked Nov 6, 2026
- A Delaware C corporation pays 8.7% of Delaware taxable income (2024 Division of Revenue instructions). revenuefiles.delaware.gov, checked Nov 6, 2026
- A Delaware LLC pays a $400 annual tax, due June 1, whether or not it makes money. corp.delaware.gov, checked Nov 6, 2026
- Delaware taxes individual income at graduated rates, 2.2% to 5.55% under $60,000 and 6.60% at $60,000 or more. revenue.delaware.gov, checked Nov 6, 2026
- A Delaware corporation owes franchise tax, with a minimum of $175 under the authorized shares method. corp.delaware.gov, checked Nov 6, 2026
- An LLC that elects corporate treatment files a Delaware corporate income tax return. revenuefiles.delaware.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.