Pennsylvania · LLC tax election
Pennsylvania LLC: S corp or C corp?
Pennsylvania turns the S election on for you, and its C corporation rate is shrinking on a published schedule.
See Pennsylvania at a glanceShort answer
Pennsylvania makes every valid federal S corporation a PA S corporation automatically, with no election form. A C corporation pays a 7.49% corporate net income tax for 2026, scheduled to fall to 4.99% by 2031. You file Form REV-976 only to opt out.
Last checked .Pennsylvania at a glance
| Question | Pennsylvania |
|---|---|
| S election recognized? | Yes, Pennsylvania follows the federal election1 |
| Separate state form and deadline | none (REV-976 is an opt-out election)2 |
| Tax the S corp itself pays | None at the entity level3 |
| C corp rate and minimum | 7.49% flat4 |
| 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 Pennsylvania?
Pennsylvania flips the usual question. Since tax years beginning after 2005, any corporation with a valid federal S election is automatically a PA S corporation, so you do not file anything to get S treatment. The form that exists, REV-976, is an election NOT to be taxed as a PA S corporation. On the C corporation side, the corporate net income tax is 7.49% for tax year 2026, down from 7.99% in 2025, with set cuts each year to 4.99% for 2031 and later. That scheduled decline will make the C corporation route cheaper every year, though it is still a heavy rate next to the owner-level tax on S income. Shareholders include their share of S income on their personal returns.
Does Pennsylvania recognize a federal S corp election?
A corporation with a valid federal S election is automatically a PA S corporation, so there is no state election form and no deadline to hit. The only form is REV-976, used to opt out, filed on or before the due date or extended due date of the first report the opt-out applies to. Shareholders include their share of the corporation's income, deductions, losses and credits on their Pennsylvania personal income tax returns.
Does my LLC need a separate Pennsylvania election or form?
No Pennsylvania S election is needed; a corporation that does NOT want PA S status files Form REV-976 by the due date of the first report for which the opt-out applies.2
What does Pennsylvania tax an S corp or LLC at the entity level?
- Pennsylvania passes a PA S corporation's income through to its shareholders instead of taxing it at the entity level; they include their share on their own tax returns.3
- A Pennsylvania LLC classified as an S corporation or partnership files the PA-20S/PA-65 information return and its income passes through to its owners.5
- Pennsylvania's corporate net income tax rate was 7.99% for 2025 and falls to 6.99% in 2027, 6.49% in 2028, 5.99% in 2029, 5.49% in 2030 and 4.99% for 2031 and each year after.7
Is a Pennsylvania LLC taxed as a C corp ever better?
A Pennsylvania C corporation pays the corporate net income tax at 7.49% for tax year 2026. The Department of Revenue's schedule continues with 6.99% for 2027, 6.49% for 2028, 5.99% for 2029, 5.49% for 2030 and 4.99% for 2031 and each year after. The capital stock and foreign franchise tax was eliminated for tax years beginning in 2016 and after. Owners are taxed again on dividends.
Run your Pennsylvania numbers
A 7.49% corporate tax is the number that makes S status attractive in Pennsylvania today, since S income is taxed once to the owners. The phase-down narrows that gap each year, so re-run the comparison annually. Add your payroll cost for the owner's salary when you count what S saves.
Result
How much would a Pennsylvania 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 + Pennsylvania LLC tax $0 | $21,194self-employment tax $21,194 + Pennsylvania LLC tax $0 |
| S corp | $9,344payroll tax $7,344 + Pennsylvania S corp tax $0 + $2,000 payroll and prep | $15,770payroll tax $13,770 + Pennsylvania S corp tax $0 + $2,000 payroll and prep |
| C corp | $17,958payroll tax $7,344 + Pennsylvania tax $2,397 + federal $6,217 + $2,000 payroll and prep | $31,920payroll tax $13,770 + Pennsylvania tax $4,494 + federal $11,656 + $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 Pennsylvania 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 Pennsylvania: How to start a Pennsylvania LLC · How to start a Pennsylvania corporation · Pennsylvania LLC cost · Pennsylvania annual report · Annual report late fees by state
File the S-Corp Election for your Pennsylvania LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
Do I have to file a state election for a Pennsylvania S corporation?
No. Any corporation with a valid federal S election is automatically a PA S corporation, so there is nothing to file. Form REV-976 is used only to elect NOT to be taxed that way, and it is due by the first report's due date.
What is the Pennsylvania corporate net income tax rate in 2026?
7.49% for January 1 through December 31, 2026, according to the Department of Revenue's corporation tax rates page. It steps down to 6.99% in 2027 and reaches 4.99% in 2031.
Does Pennsylvania still have a capital stock tax?
No. The Department of Revenue's rate page says the capital stock and foreign franchise tax was eliminated for tax years beginning January 1, 2016 and after. The corporate net income tax is what remains.
How are PA S corporation shareholders taxed?
They include their share of the corporation's separately stated items of income, deduction, loss and credit, and their share of non-separately stated income, on their Pennsylvania personal income tax returns.
Sources 10 links, checked Nov 6, 2026
- Pennsylvania treats any corporation with a valid federal S election as a PA S corporation automatically. pa.gov, checked Nov 6, 2026
- No Pennsylvania S election is needed; a corporation that does NOT want PA S status files Form REV-976 by the due date of the first report for which the opt-out applies. pa.gov, checked Nov 6, 2026
- Pennsylvania passes a PA S corporation's income through to its shareholders instead of taxing it at the entity level; they include their share on their own tax returns. pa.gov, checked Nov 6, 2026
- Pennsylvania's corporate net income tax rate is 7.49% for tax year 2026 (January 1 to December 31, 2026), falling each year to 4.99% for 2031 and later. pa.gov, checked Nov 6, 2026
- A Pennsylvania LLC classified as an S corporation or partnership files the PA-20S/PA-65 information return and its income passes through to its owners. pa.gov, checked Nov 6, 2026
- Pennsylvania S corporation shareholders include their share of the corporation's income on their personal income tax returns. pa.gov, checked Nov 6, 2026
- Pennsylvania's corporate net income tax rate was 7.99% for 2025 and falls to 6.99% in 2027, 6.49% in 2028, 5.99% in 2029, 5.49% in 2030 and 4.99% for 2031 and each year after. pa.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.