West Virginia LLC: S corp or C corp?

West Virginia at a glance

What is different about West Virginia?

West Virginia gives S corporations a clean break. The Tax Division's report says S corporations are exempt from the Corporation Net Income Tax, and pass-through entities such as S corporations, partnerships and LLCs file an information return instead. A C corp gets no such break: it pays 6.5% flat on its West Virginia taxable income. Owners of pass-throughs are taxed on their own returns at marginal rates running from 2.11% on income under $10,000 to 4.58% on income over $60,000. So the gap between S and C in West Virginia is the 6.5% company layer, and the individual rates are low enough that the S route often pencils out.

Does West Virginia recognize a federal S corp election?

West Virginia exempts S corporations from the Corporation Net Income Tax, so your LLC taxed as an S corp owes no company-level income tax. It files the pass-through informational return, Form WV/PTE-100, and the owners are taxed on their share at personal rates. The entity also reports and pays withholding tax for nonresident shareholders. Entities can choose to file the Elective Pass Through Entity return, EPT-100, instead of the standard route.

Does my LLC need a separate West Virginia election or form?

West Virginia has no separate S election form; S corporations file the pass-through entity informational return, Form WV/PTE-100.²

What does West Virginia tax an S corp or LLC at the entity level?

• A West Virginia S corporation is exempt from the 6.5% Corporation Net Income Tax and files an information return.³
• West Virginia S corporations report and pay withholding tax for nonresident shareholders on the same pass-through forms.⁶

Is a West Virginia LLC taxed as a C corp ever better?

A West Virginia C corp pays the Corporation Net Income Tax at a flat 6.5% of West Virginia taxable income. The calculation starts from the corporation's federal taxable income. The Tax Division also treats LLCs taxed as corporations for federal purposes as subject to the tax. The rate is a single flat figure, not a graduated schedule. When the corporation pays you dividends, they are taxed again on your personal return, where rates run from 2.11% to 4.58%.

Run your West Virginia numbers

In West Virginia the S election avoids the entire 6.5% corporate layer, since S corporations are exempt. That is a direct state saving on whatever profit would stay in the company. Your costs are the WV/PTE-100 information return and nonresident withholding if you have out-of-state owners. If you would pull most profit out anyway, the S route still removes the second round of tax on dividends.

How much would a West Virginia LLC owner save as an S corp?

Assumes a 60% salary⁸ and a single filer. Income tax is left out. C corp dividends are taxed again. We could not confirm on an official West Virginia source whether a default LLC pays an entity-level tax, so none is shown.

When is the Form 2553 deadline for a West Virginia LLC, and what if I miss it?

Late relief: federal steps, deadline guide.

What to do next

More on West Virginia: How to start a West Virginia LLC · How to start a West Virginia corporation · West Virginia LLC cost · West Virginia annual report · Annual report late fees by state

Common questions