Connecticut: what each business structure costs a year

At $100,000 profit, an LLC taxed as an S corp costs $4,155 a year less than a sole proprietorship in Connecticut. All figures are 2026 tax and fees.

$4,155 a year

less as an LLC taxed as an S corp than as a sole proprietorship in Connecticut, at these numbers. That includes the state's pass-through entity tax election.

Connecticut, 2026: $100,000 profit, single filer

Structure

Yearly cost

vs yours

To set up

Sole proprietorship yours

$25,901

Itemized: $25,901

Self-employment taxirs.gov, 2026 rates	$14,130
Federal income taxirs.gov, 2026 rates	$8,235
State income taxportal.ct.gov, checked Oct 20, 2026	$3,536
Yearly cost	$25,901

Single-member LLC

$25,952

+$51

$120

Itemized: $25,952

Annual Reportbusiness.ct.gov, checked Oct 20, 2026	$80
Self-employment taxirs.gov, 2026 rates	$14,118
Federal income taxirs.gov, 2026 rates	$8,222
State income taxportal.ct.gov, checked Oct 20, 2026	$3,532
Yearly cost	$25,952

LLC taxed as an S corp lowest

$21,746

−$4,155

$120

Itemized: $21,746

Annual Reportbusiness.ct.gov, checked Oct 20, 2026	$80
Payroll tax on your salaryirs.gov, 2026 rates	$6,675
State disability and paid leavectpaidleave.org, checked Oct 20, 2026	$200
Payroll service and tax return (estimate)	$1,800
Connecticut pass-through entity tax, paid by the company (elected)portal.ct.gov, checked Oct 20, 2026	$3,810
Federal income taxirs.gov, 2026 rates	$8,892
State income tax, after the PTET creditportal.ct.gov, checked Oct 20, 2026	$289
Yearly cost	$21,746

S corporation

$21,801

−$4,100

$250

Itemized: $21,801

Annual Reportcga.ct.gov, checked Oct 20, 2026	$150
Payroll tax on your salaryirs.gov, 2026 rates	$6,675
State disability and paid leavectpaidleave.org, checked Oct 20, 2026	$200
Payroll service and tax return (estimate)	$1,800
Connecticut pass-through entity tax, paid by the company (elected)portal.ct.gov, checked Oct 20, 2026	$3,805
Federal income taxirs.gov, 2026 rates	$8,881
State income tax, after the PTET creditportal.ct.gov, checked Oct 20, 2026	$290
Yearly cost	$21,801

C corporation

$31,165

+$5,264

$250

Itemized: $31,165

Annual Reportcga.ct.gov, checked Oct 20, 2026	$150
Payroll tax on your salaryirs.gov, 2026 rates	$6,675
State disability and paid leavectpaidleave.org, checked Oct 20, 2026	$200
Payroll service and tax return (estimate)	$2,000
State corporate income taxportal.ct.gov, checked Oct 20, 2026	$4,068
Federal corporate income tax (21%)irs.gov, 2026 rates	$10,535
Federal income taxirs.gov, 2026 rates	$4,732
State income taxportal.ct.gov, checked Oct 20, 2026	$2,805
Yearly cost	$31,165

What these figures count

State income tax, and state taxes on the business itself: franchise, LLC, S corp, gross receipts and excise taxes.
Social Security and Medicare on both sides of an owner salary, federal unemployment tax and the state's new-employer rate.
The 20% qualified business income deduction with its income limits and the professional-service rule.
Yearly report fees, and a cost you can change for payroll and the business tax return.

Many S corp calculators leave out state taxes and the QBI deduction, which can make the election look better than it is.

When an S corp election pays in Connecticut

Electing S corp tax treatment for an LLC starts to pay in Connecticut at about $52,500 of profit, with the default salary and $1,800 a year for payroll and the extra tax return.

An S corp in Connecticut can elect to pay the state's income tax itself, a pass-through entity tax of 6.99%, and the owner gets a credit for it. The company deducts it on the federal return, so it is not held to the SALT cap. The calculator uses it when it lowers the totalportal.ct.gov.

Profit	Sole prop	LLC	LLC as S corp	C corp
$30,000	$5,511	$5,571	$7,338	$7,946
$50,000	$10,898	$10,956	$11,173	$13,822
$75,000	$17,754	$17,811	$14,751	$21,375
$100,000	$25,901	$25,952	$21,746	$31,165
$150,000	$43,821	$43,873	$37,022	$52,782
$200,000	$62,433	$62,491	$53,221	$73,759
$300,000	$107,474	$107,497	$88,277	$117,116

Single filer, no other income, revenue taken as 1.5 times profit, default salary. The lowest cost in each row is marked.

State fees and taxes in Connecticut

	LLC	Corporation
Filing to form	$120Certificate of Organization	$250Certificate of Incorporation (stock corporation)	business.ct.gov
Yearly report	Annual Report, $80 a year	Annual Report, $150 a year	business.ct.gov
Report due	Between January 1 and March 31 each year	First report within 90 days of incorporation, then each year on that report's anniversary date

Connecticut taxes personal income in 7 brackets, from 2% to 6.99% (2026, single filer). portal.ct.gov
C corporations pay 7.5% to 8.25% of net income, with a minimum of $250. portal.ct.gov
Connecticut follows the federal S corp election.
New employers pay state unemployment tax of 1.9% on the first $27,000 of each employee's wages. That applies to an owner's salary from an S or C corp. portal.ct.gov
CT Paid Leave contribution: 0.5% withheld from wages up to $184,500. ctpaidleave.org
Annual report filed online only. The $250 business entity tax was repealed for periods beginning after 2018.
The $250 fee includes the minimum franchise tax for up to 20,000 authorized shares. The $150 Organization and First Report is the required first annual report, counted in annual_fee rather than formation_fee.

Not in the calculator: No local income taxes. Towns levy property tax on business personal property (equipment), filed each year with the town assessor.

Switching calculators for Connecticut

By profession in Connecticut

Questions

Is an S corp worth it in Connecticut?

On these figures, from about $52,500 of profit. At $100,000 an LLC taxed as an S corp costs $21,746 a year against $25,952 for a plain LLC, $4,206 less. The saving comes from paying Social Security and Medicare tax on a salary instead of on all profit.

How much does an LLC cost per year in Connecticut?

The state charges Annual Report, $80 a year. Forming one costs $120.

Does Connecticut recognise the S corp election?

Yes. The federal election carries over with no separate state form. Federal S election applies. Pass-through entity tax is elective from 2024 (annual election on Form CT-PET), not modelled.

What income tax does Connecticut charge?

Connecticut taxes personal income in 7 brackets, from 2% to 6.99% (2026, single filer). C corporations pay 7.5% to 8.25% of net income, with a minimum of $250.

Sources checked 2026-10-20. Each figure links to the state or IRS page it comes from.

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