S corp vs C corp in District of Columbia: which costs less (2026)

At $100,000 profit in District of Columbia, an S corporation costs $26,594 a year in tax and fees and a C corporation costs $32,232. On these figures a C corporation does not cost less at any profit up to $500,000.

+$5,638 a year

more for a C corporation than an S corporation in District of Columbia, at these numbers.

With these settings the switch does not pay at any profit from $10,000 to $500,000.

District of Columbia, 2026: $100,000 profit, single filer

Item	S corp	C corp	Change
Biennial Reportdlcp.dc.gov, checked Oct 23, 2026	$150	$150	$0
Payroll tax on your salaryirs.gov, 2026 rates	$6,723	$6,723	$0
Payroll service and tax return (estimate)	$1,800	$2,000	+$200
DC corporation franchise tax on S corporationsotr.cfo.dc.gov, checked Oct 23, 2026	$4,499	$0	−$4,499
Federal income taxirs.gov, 2026 rates	$8,750	$4,679	−$4,071
State income taxotr.cfo.dc.gov, checked Oct 23, 2026	$4,672	$3,770	−$902
State corporate income taxotr.cfo.dc.gov, checked Oct 23, 2026	$0	$4,470	+$4,470
Federal corporate income tax (21%)irs.gov, 2026 rates	$0	$10,440	+$10,440
Yearly cost	$26,594	$32,232	+$5,638

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.

Yearly cost at each profit level

Profit	S corp	C corp	Difference
$30,000	$7,638	$7,970	+$332
$50,000	$12,569	$14,111	+$1,542
$75,000	$18,263	$22,091	+$3,828
$100,000	$26,594	$32,232	+$5,638
$150,000	$45,023	$55,160	+$10,137
$200,000	$64,244	$77,270	+$13,026
$300,000	$103,440	$122,376	+$18,936

Federal and District of Columbia tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is C corporation minus S corporation.

What the switch takes in District of Columbia

Revoke the S election with a statement to the IRS signed by owners of more than half the shares. See ending an S election. A new S election then has to wait five years.
Federal return each year: Form 1120, due April 15 for a calendar year.
State upkeep each year: Biennial Report, $300 every two years, due April 1 every second year, first due April 1 of the year after formation.

What changes between the two

A C corporation pays 21% federal tax and District of Columbia corporate tax on its profit, and the owner pays tax again on dividends (the double tax). An S corporation pays no federal income tax itself: profit lands on the owner's return, where the 20% qualified business income deduction can apply.

The figures assume all C corp profit after tax is paid out as dividends. Profit kept in the company to grow it is taxed only at the corporate rate until it is paid out, which is where a C corp can come out ahead.

Questions

How much does it save at $100,000 in District of Columbia?

Nothing. C corporation costs $5,638 a year more ($32,232 against $26,594).

When does a C corp make sense in District of Columbia?

Mostly when profit stays in the company, when outside investors need one, or for the qualified small business stock exclusion. For an owner who takes the profit out, the second tax on dividends usually costs more. On these figures it never costs less up to $500,000.

More for District of Columbia

Common cases in District of Columbia

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