Kentucky: what each business structure costs a year
At $100,000 profit, an LLC taxed as an S corp costs $4,730 a year less than a sole proprietorship in Kentucky. All figures are 2026 tax and fees.
$4,730 a year
less as an LLC taxed as an S corp than as a sole proprietorship in Kentucky, at these numbers. That includes the state's pass-through entity tax election.
Kentucky, 2026: $100,000 profit, single filer
| Structure | Yearly cost | vs yours | To set up | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sole proprietorship yours | $25,500 | $0 | |||||||||||||||||
Itemized: $25,500
| |||||||||||||||||||
| Single-member LLC | $25,510 | +$10 | $40 | ||||||||||||||||
Itemized: $25,510
| |||||||||||||||||||
| LLC taxed as an S corp lowest | $20,770 | −$4,730 | $40 | ||||||||||||||||
Itemized: $20,770
| |||||||||||||||||||
| S corporation | $20,770 | −$4,730 | $50 | ||||||||||||||||
Itemized: $20,770
| |||||||||||||||||||
| C corporation | $29,759 | +$4,259 | $50 | ||||||||||||||||
Itemized: $29,759
| |||||||||||||||||||
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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 Kentucky
Electing S corp tax treatment for an LLC starts to pay in Kentucky at about $50,000 of profit, with the default salary and $1,800 a year for payroll and the extra tax return.
An S corp in Kentucky can elect to pay the state's income tax itself, a pass-through entity tax of 3.5%, 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 totalrevenue.ky.gov.
| Profit | Sole prop | LLC | LLC as S corp | C corp |
|---|---|---|---|---|
| $30,000 | $6,039 | $6,051 | $7,587 | $8,057 |
| $50,000 | $11,241 | $11,252 | $11,104 | $13,549 |
| $75,000 | $17,817 | $17,827 | $14,295 | $20,444 |
| $100,000 | $25,500 | $25,510 | $20,770 | $29,759 |
| $150,000 | $42,369 | $42,379 | $34,811 | $49,973 |
| $200,000 | $59,818 | $59,830 | $49,642 | $69,373 |
| $300,000 | $101,966 | $101,971 | $81,890 | $109,570 |
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 Kentucky
| LLC | Corporation | ||
|---|---|---|---|
| Filing to form | $40Articles of Organization | $50Articles of Incorporation | sos.ky.gov |
| Yearly report | Annual Report, $15 a year | Annual Report, $15 a year | sos.ky.gov |
| Report due | June 30 (filing window January 1 to June 30) | June 30 (filing window January 1 to June 30) | |
| Kentucky limited liability entity tax (LLET)0.095% of gross receipts, none up to $3,000,000, minimum $175 | yes | yes | revenue.ky.gov |
- Kentucky taxes personal income at a flat 3.5% (2026). revenue.ky.gov
- C corporations pay 5% of net income. revenue.ky.gov
- Kentucky follows the federal S corp election.
- New employers pay state unemployment tax of 2.7% on the first $12,000 of each employee's wages. That applies to an owner's salary from an S or C corp. ui.ky.gov
- Domestic entities that miss the June 30 deadline are administratively dissolved.
- Formation is the $40 filing fee plus the organization tax on authorized shares (KRS 136.060), minimum $10 for 1,000 shares or fewer; more authorized shares cost more.
Not in the calculator: Many Kentucky cities and counties levy occupational license taxes on wages and on business net profits (for example Louisville Metro and Lexington-Fayette, each around 2% or more combined), withheld by the employer and filed by the business; these are not modelled.
Switching calculators for Kentucky
- Sole proprietorship vs LLC
- LLC vs S corp
- Sole proprietorship vs S corp
- S corp vs C corp
- LLC vs C corp
- Sole proprietorship vs C corp
- LLC taxed as S corp vs S corporation
- What an LLC costs in Kentucky
- Take-home pay in Kentucky
- Quarterly estimated tax in Kentucky
By profession in Kentucky
- Management consultant
- Software developer
- Graphic designer
- Photographer
- Real estate agent
- Insurance agent
- Financial advisor
- Therapist
- Physical therapist
- Nurse practitioner
- Physician
- Dentist
- Lawyer
- Accountant
- Freelance writer
- Web developer
- Marketing consultant
- Electrician
- Plumber
- General contractor
- Truck driver
- Hair stylist
- Personal trainer
- Rideshare driver
Questions
Is an S corp worth it in Kentucky?
On these figures, from about $50,000 of profit. At $100,000 an LLC taxed as an S corp costs $20,770 a year against $25,510 for a plain LLC, $4,740 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 Kentucky?
The state charges Annual Report, $15 a year. LLCs can also owe Kentucky limited liability entity tax (LLET). Forming one costs $40.
Does Kentucky recognise the S corp election?
Yes. The federal election carries over with no separate state form. Kentucky follows the federal S election; S corps file Form 720S and still owe the LLET.
What income tax does Kentucky charge?
Kentucky taxes personal income at a flat 3.5% (2026). C corporations pay 5% of net income.
How this page models Kentucky (2)
- The schema has one flat rate per entity tax, so the LLET uses the top-band 0.095% of gross receipts above $3 million with the $175 minimum, which overstates the tax for entities with $3 million to $6 million of receipts where Kentucky's sliding scale applies.
- Corporate formation uses the Secretary of State's $40 Articles of Incorporation fee plus the KRS 136.060 minimum organization tax of $10 for 1,000 or fewer authorized shares, the typical small-business case; more authorized shares cost more.
Sources checked 2026-10-23. Each figure links to the state or IRS page it comes from.
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