Maine · LLC tax election
Maine LLC: S corp or C corp?
Maine's corporate rate starts low and climbs through four brackets, which changes who benefits from S.
See Maine at a glanceShort answer
Maine taxes a C corporation 3.5% on the first $350,000 of income and up to 8.93% above $3,500,000. An S corporation generally pays no Maine corporate tax on ordinary income. For a small, profitable business the S election usually moves income out of the higher brackets.
Last checked .Maine at a glance
What is different about Maine?
Maine has four corporate brackets, and the first one is gentle: 3.5% on adjusted federal taxable income up to $350,000. Then it jumps to 7.93% up to $1,050,000, 8.33% up to $3,500,000, and 8.93% above that. A small C corporation therefore stays mostly in the 3.5% bracket, while a company earning more than $350,000 sees the rate more than double. Maine generally leaves S corporations alone at the entity level unless there is corporate-level federal taxable income, such as capital gains or built-in gains. So the question here is where your profit sits relative to $350,000.
Does Maine recognize a federal S corp election?
Maine follows the federal S election. By statute, an S corporation's Maine net income is only the amount taxable at the federal level under sections 1374 and 1375, which means capital gains and built-in gains taxed at the corporate level. Everything else passes through, and shareholders report their share on their own Maine returns. We found no separate Maine S election form, so plan on following the federal election.
Does my LLC need a separate Maine election or form?
Maine has no separate S election; an S corporation is taxed only on the amount federal law taxes at the corporate level under sections 1374 and 1375.2
What does Maine tax an S corp or LLC at the entity level?
- Maine taxes an S corporation itself only on income federal law taxes at the corporate level under sections 1374 and 1375.3
Is a Maine LLC taxed as a C corp ever better?
A Maine C corporation pays 3.5% on income up to $350,000, 7.93% from there to $1,050,000, 8.33% to $3,500,000 and 8.93% above $3,500,000. These brackets have applied since tax years beginning in 2018. The first bracket is low, so a small C corporation can look cheap on paper, though dividends are then taxed again on your return.
Run your Maine numbers
In Maine the S election starts to pay when profit passes the $350,000 line and the C corporation rate jumps to 7.93%. Below it, the 3.5% bracket makes the state side of S and C close, and the federal payroll tax savings carry the decision.
Result
How much would a Maine 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 | $21,194self-employment tax $21,194 |
| S corp | $9,344payroll tax $7,344 + Maine S corp tax $0 + $2,000 payroll and prep | $15,770payroll tax $13,770 + Maine S corp tax $0 + $2,000 payroll and prep |
| C corp | $16,949payroll tax $7,344 + Maine tax $1,120 + federal $6,485 + $2,000 payroll and prep | $30,029payroll tax $13,770 + Maine tax $2,100 + federal $12,159 + $2,000 payroll and prep |
Assumes a 60% salary7 and a single filer. Income tax is left out. C corp dividends are taxed again. We could not confirm on an official Maine source whether a default LLC pays an entity-level tax, so none is shown.
When is the Form 2553 deadline for a Maine 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 Maine: How to start a Maine LLC · How to start a Maine corporation · Maine LLC cost · Maine annual report · Annual report late fees by state
File the S-Corp Election for your Maine LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
What is the Maine corporate income tax rate?
Graduated: 3.5% up to $350,000, 7.93% to $1,050,000, 8.33% to $3,500,000, and 8.93% above $3,500,000.
Does Maine tax S corporations?
Generally not on ordinary income. Maine taxes an S corporation only on income federal law taxes at the corporate level under sections 1374 and 1375, such as certain built-in gains.
Does Maine have a separate S election?
Not that we found. Maine ties an S corporation's net income to what federal law taxes at the corporate level, so the federal election is the one that counts.
Does Maine tax my personal income from an S corporation?
Yes. Maine imposes an income tax on the Maine taxable income of every resident individual, so profit that passes through lands on your Maine return.
Sources 8 links, checked Nov 6, 2026
- Maine follows the federal S election: for an S corporation, Maine net income is the amount taxable at the federal level under sections 1374 and 1375. legislature.maine.gov, checked Nov 6, 2026
- Maine has no separate S election; an S corporation is taxed only on the amount federal law taxes at the corporate level under sections 1374 and 1375. legislature.maine.gov, checked Nov 6, 2026
- Maine taxes an S corporation itself only on income federal law taxes at the corporate level under sections 1374 and 1375. legislature.maine.gov, checked Nov 6, 2026
- Maine taxes C corporation income at 3.5% up to $350,000, 7.93% from there to $1,050,000, 8.33% to $3,500,000 and 8.93% above $3,500,000, for tax years beginning on or after January 1, 2018. legislature.maine.gov, checked Nov 6, 2026
- Maine taxes the income of every resident individual, so S corporation profit is taxed on the owner's Maine return. legislature.maine.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.