Rhode Island · LLC tax election
Rhode Island LLC: S corp or C corp?
Rhode Island charges the same $400 floor whether you are an LLC, an S corporation or a C corporation.
See Rhode Island at a glanceShort answer
In Rhode Island, S and C corporations both pay at least a $400 minimum tax each year, and a C corporation pays 7% of Rhode Island net income if that is more. A default LLC filing Form RI-1065 also pays a $400 annual fee, so S status adds no new floor.
Last checked .Rhode Island at a glance
| Question | Rhode Island |
|---|---|
| S election recognized? | Yes, Rhode Island follows the federal election1 |
| Separate state form and deadline | No separate state form2 |
| Tax the S corp itself pays | $400 minimum; 7% only on income the S corp pays federal tax on.3 |
| C corp rate and minimum | 7% flat, minimum $4004 |
| Entity tax on a default LLC | $400 a year5 |
| Personal income tax | Yes, on wages and pass-through income6 |
What is different about Rhode Island?
Rhode Island is unusual because the entity-level floor is the same under every structure. A C corporation pays 7% of net income apportioned to Rhode Island or a minimum of $400, whichever is greater. An S corporation files Form RI-1120S and is subject to the same $400 minimum. And a limited liability company not taxed as a corporation, filing Form RI-1065, owes an annual fee equal to that corporate minimum, with general partnerships excepted. So moving from a default LLC to an S corporation does not add a new yearly charge. The decision turns on the 7% rate on income that is taxable at the federal level and on federal payroll tax savings, not on a state fee.
Does Rhode Island recognize a federal S corp election?
Rhode Island recognizes the federal S election. An S corporation files an annual Form RI-1120S and is subject to a $400 minimum tax, with no separate state election form. If the S corporation is taxable for federal purposes, it attaches Rhode Island Schedule S and pays any tax due at the 7% rate. Pass-through entities also withhold on nonresident members' Rhode Island income.
Does my LLC need a separate Rhode Island election or form?
Rhode Island has no separate S election: a corporation with a federal subchapter S election files Form RI-1120S.2
What does Rhode Island tax an S corp or LLC at the entity level?
Is a Rhode Island LLC taxed as a C corp ever better?
A Rhode Island C corporation files Form RI-1120C and pays 7% of net income apportioned to Rhode Island, or a minimum of $400, whichever yields the greater tax, per the 2025 instructions. Owners pay personal tax again on dividends. The 2025 instructions are the latest on the Division of Taxation's site, so this page uses that rate and does not claim a 2026 change.
Run your Rhode Island numbers
Because the $400 floor applies to the LLC, the S corporation and the C corporation alike, Rhode Island's own cost of switching to S is close to zero. S status starts to pay once profit is high enough that self-employment tax savings beat the added payroll and filing cost. The 7% C corporation rate makes staying a C corporation the weaker choice for most owners.
Result
How much would a Rhode Island LLC owner save as an S corp?
| Taxed as | At $80,000 profit | At $150,000 profit |
|---|---|---|
| Default LLC | $11,704self-employment tax $11,304 + Rhode Island LLC tax $400 | $21,594self-employment tax $21,194 + Rhode Island LLC tax $400 |
| S corp | $9,744payroll tax $7,344 + Rhode Island S corp tax $400 + $2,000 payroll and prep | $16,170payroll tax $13,770 + Rhode Island S corp tax $400 + $2,000 payroll and prep |
| C corp | $17,834payroll tax $7,344 + Rhode Island tax $2,240 + federal $6,250 + $2,000 payroll and prep | $31,688payroll tax $13,770 + Rhode Island tax $4,200 + federal $11,718 + $2,000 payroll and prep |
Assumes a 60% salary8 and a single filer. Income tax is left out. C corp dividends are taxed again. Rhode Island's 7% S corp tax reaches only federally taxed income; the $400 minimum is shown.
When is the Form 2553 deadline for a Rhode Island 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 Rhode Island: How to start a Rhode Island LLC · How to start a Rhode Island corporation · Rhode Island LLC cost · Rhode Island annual report · Annual report late fees by state
File the S-Corp Election for your Rhode Island LLC
We file Form 2553 for a flat $165.
Get the S-Corp ElectionCommon questions
What is the Rhode Island minimum business tax?
$400. The corporate rate section sets 7% of Rhode Island net income or a minimum of $400, whichever gives the greatest tax. S corporations are also subject to the $400 minimum.
Does a Rhode Island LLC pay a yearly fee?
Yes. An LLC not treated as a corporation files Form RI-1065 and is subject to an annual fee equal to the corporate minimum tax, $400, with the exception of general partnerships.
What form does a Rhode Island S corporation file?
Form RI-1120S, filed annually, with a $400 minimum tax. If the S corporation is taxable for federal purposes, it must also attach Rhode Island Schedule S and pay any tax due at the 7% rate.
What is the Rhode Island corporate tax rate?
7% of net income apportioned to Rhode Island, with a $400 minimum, according to the Division of Taxation's 2025 business corporation tax instructions. Whichever amount yields the greatest tax is what the corporation pays.
Sources 9 links, checked Nov 6, 2026
- Rhode Island recognizes the federal S election; an S corporation files Form RI-1120S and owes at least a $400 minimum tax. tax.ri.gov, checked Nov 6, 2026
- Rhode Island has no separate S election: a corporation with a federal subchapter S election files Form RI-1120S. tax.ri.gov, checked Nov 6, 2026
- A Rhode Island S corporation pays a $400 minimum tax every year, and 7% on any income that is taxable at the federal level. tax.ri.gov, checked Nov 6, 2026
- Rhode Island taxes C corporation income at 7% of net income apportioned to the state, with a $400 minimum, per the 2025 instructions, the latest published. tax.ri.gov, checked Nov 6, 2026
- A Rhode Island LLC not taxed as a corporation (filing Form RI-1065) owes an annual fee equal to the $400 corporate minimum tax. tax.ri.gov, checked Nov 6, 2026
- Rhode Island taxes individuals at 3.75%, 4.75% and 5.99% depending on taxable income (2025 schedule). tax.ri.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.