Montana · LLC tax election
Montana LLC: S corp or C corp?
Montana makes the S election automatic and files it on its own pass-through form.
See Montana at a glanceShort answer
Montana follows the federal S election: if you elect S status federally, you file as an S corporation in Montana on Form PTE. A C corporation pays 6.75% of income (7% with a water's edge election), with a $50 minimum tax. Montana also taxes individual income, so S corporation profit lands on your return.
Last checked .Montana at a glance
What is different about Montana?
Montana does not ask for a second S election. The Department of Revenue says if you make a Subchapter S election at the federal level, you must also file as an S corporation in Montana, using the Pass-Through Entity Tax Return, Form PTE. Only C corporations file the Corporate Income Tax Return, Form CIT, and pay the corporate rate: 6.75% standard, 7% if you elect water's edge, and a $50 minimum tax. A small-sales alternative exists at 0.5% of gross sales for corporations with only sales activity in Montana and $100,000 or less in Montana sales. Corporations also have an e-file mandate unless gross receipts are $750,000 or less.
Does Montana recognize a federal S corp election?
Montana follows the federal S election; there is no separate state election. An S corporation reports on Form PTE. We did not verify whether a Montana S corporation owes any entity-level tax or minimum, so none is stated. Montana taxes individual income, so profit is taxed on the owners' returns. Corporations with gross receipts above $750,000 must e-file, per the Department's page.
Does my LLC need a separate Montana election or form?
Montana has no separate S election; an S corporation reports on Form PTE.2
What does Montana tax an S corp or LLC at the entity level?
- Montana's 0.5% alternative gross sales rate is open to corporations with only sales activity in Montana, no real or tangible property there, and Montana gross sales of $100,000 or less.5
- Corporations must e-file Montana corporate returns, unless gross receipts for the tax period are $750,000 or less.6
Is a Montana LLC taxed as a C corp ever better?
A Montana C corporation pays 6.75% on standard income, or 7% with a water's edge election, and a $50 minimum tax. Corporations with only sales activity in Montana, no real or tangible property there, and Montana gross sales of $100,000 or less can use an alternative rate of 0.5% of gross sales. The $50 minimum applies to each company with Montana activity, even in a loss year.
Run your Montana numbers
In Montana the S election pays when you want profit out of the 6.75% corporate layer. The state cost of staying a C corporation is that rate plus dividends taxed again on your return. We did not verify an S-corp entity tax, so the comparison here is the 6.75% against your personal Montana rate.
Result
How much would a Montana 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 + $2,000 payroll and prep | $15,770payroll tax $13,770 + $2,000 payroll and prep |
| C corp | $17,770payroll tax $7,344 + Montana tax $2,160 + federal $6,266 + $2,000 payroll and prep | $31,570payroll tax $13,770 + Montana tax $4,050 + federal $11,750 + $2,000 payroll and prep |
Assumes a 60% salary8 and a single filer. Income tax is left out. C corp dividends are taxed again. Montana entity-level taxes are not included: we could not confirm them on an official Montana source.
When is the Form 2553 deadline for a Montana 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 Montana: How to start a Montana LLC · How to start a Montana corporation · Montana LLC cost · Montana annual report · Annual report late fees by state
File the S-Corp Election for your Montana LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
Does Montana recognize the federal S election?
Yes. If you make a Subchapter S election at the federal level, you must also file as an S corporation in Montana. There is no separate election form; the state follows your federal filing and asks for Form PTE to report the activity.
What form does a Montana S corporation file?
The Montana Pass-Through Entity Tax Return, Form PTE, to report the S corporation's activity. C corporations file the Corporate Income Tax Return, Form CIT, and pay corporate income tax. The Department's page keeps the two filings separate.
What is the Montana corporate tax rate?
6.75% standard, 7% with a water's edge election, 0.5% alternative on gross sales for qualifying sales-only corporations, and a $50 minimum tax, per the Department of Revenue. To qualify for the 0.5% rate, Montana gross sales must be $100,000 or less.
Does Montana require e-filing?
Yes, corporations must e-file for all tax periods beginning after December 31, 2022, using an approved corporate income tax software provider. The mandate does not apply if the corporation has gross receipts of $750,000 or less for the tax period, which is an automatic exemption.
Sources 9 links, checked Nov 6, 2026
- Montana follows the federal S election: if you elect S status federally, you file as an S corporation in Montana too. revenue.mt.gov, checked Nov 6, 2026
- Montana has no separate S election; an S corporation reports on Form PTE. revenue.mt.gov, checked Nov 6, 2026
- Montana taxes a C corporation at 6.75% (7% with a water's edge election), with a $50 minimum tax. revenue.mt.gov, checked Nov 6, 2026
- Montana taxes individual income, so S corporation profit is taxed on the owner's Montana return. archive.legmt.gov, checked Nov 6, 2026
- Montana's 0.5% alternative gross sales rate is open to corporations with only sales activity in Montana, no real or tangible property there, and Montana gross sales of $100,000 or less. revenue.mt.gov, checked Nov 6, 2026
- Corporations must e-file Montana corporate returns, unless gross receipts for the tax period are $750,000 or less. revenue.mt.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.