S corp vs C corp in Illinois: which costs less (2026)

At $100,000 profit in Illinois, an S corporation costs $22,785 a year in tax and fees and a C corporation costs $32,580. On these figures a C corporation does not cost less at any profit up to $500,000.

+$9,795 a year

more for a C corporation than an S corporation in Illinois, at these numbers.

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

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

Item	S corp	C corp	Change
Annual Report (Form BCA 14.05)ilsos.gov, checked Oct 24, 2026	$75	$75	$0
Payroll tax on your salaryirs.gov, 2026 rates	$6,639	$6,639	$0
Payroll service and tax return (estimate)	$1,800	$2,000	+$200
Illinois personal property replacement income tax (partnerships and S corps)tax.illinois.gov, checked Oct 24, 2026	$819	$0	−$819
Illinois pass-through entity tax, paid by the company (elected)tax.illinois.gov, checked Oct 24, 2026	$2,659	$0	−$2,659
Federal income taxirs.gov, 2026 rates	$8,958	$4,616	−$4,342
State income taxtax.illinois.gov, checked Oct 24, 2026	$1,835	$3,759	+$1,924
State corporate income taxtax.illinois.gov, checked Oct 24, 2026	$0	$5,163	+$5,163
Federal corporate income tax (21%)irs.gov, 2026 rates	$0	$10,328	+$10,328
Yearly cost	$22,785	$32,580	+$9,795

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	$8,145	$8,602	+$457
$50,000	$12,097	$14,787	+$2,690
$75,000	$15,938	$22,798	+$6,860
$100,000	$22,785	$32,580	+$9,795
$150,000	$37,750	$54,205	+$16,455
$200,000	$53,532	$75,015	+$21,483
$300,000	$87,361	$117,796	+$30,435

Federal and Illinois 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 Illinois

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: Annual Report (Form BCA 14.05), $75 a year, due before the first day of the anniversary month of incorporation.

What changes between the two

A C corporation pays 21% federal tax and Illinois 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 Illinois?

Nothing. C corporation costs $9,795 a year more ($32,580 against $22,785).

When does a C corp make sense in Illinois?

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 Illinois

Common cases in Illinois

Other states