StructureCost2026

Minnesota: what each business structure costs a year

At $100,000 profit, an LLC taxed as an S corp costs $4,249 a year less than a sole proprietorship in Minnesota. All figures are 2026 tax and fees.

$4,249 a year

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

More settings revenue, salary, filing status, payroll costs, PTET

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

StructureYearly costvs yoursTo set up
Sole proprietorship yours $27,161 $0
Itemized: $27,161
Self-employment taxirs.gov, 2026 rates$14,130
Federal income taxirs.gov, 2026 rates$8,235
State income taxrevenue.state.mn.us, checked Oct 23, 2026$4,796
Yearly cost$27,161
Single-member LLC $27,161 +$0 $155
Itemized: $27,161
Self-employment taxirs.gov, 2026 rates$14,130
Federal income taxirs.gov, 2026 rates$8,235
State income taxrevenue.state.mn.us, checked Oct 23, 2026$4,796
Yearly cost$27,161
LLC taxed as an S corp lowest $22,912 −$4,249 $155
Itemized: $22,912
Payroll tax on your salaryirs.gov, 2026 rates$7,016
State disability and paid leavedli.mn.gov, checked Oct 23, 2026$176
Payroll service and tax return (estimate)$1,800
Minnesota pass-through entity tax, paid by the company (elected)revenue.state.mn.us, checked Oct 23, 2026$5,343
Federal income taxirs.gov, 2026 rates$8,577
Yearly cost$22,912
S corporation $22,912 −$4,249 $155
Itemized: $22,912
Payroll tax on your salaryirs.gov, 2026 rates$7,016
State disability and paid leavedli.mn.gov, checked Oct 23, 2026$176
Payroll service and tax return (estimate)$1,800
Minnesota pass-through entity tax, paid by the company (elected)revenue.state.mn.us, checked Oct 23, 2026$5,343
Federal income taxirs.gov, 2026 rates$8,577
Yearly cost$22,912
C corporation $33,104 +$5,943 $155
Itemized: $33,104
Payroll tax on your salaryirs.gov, 2026 rates$7,016
State disability and paid leavedli.mn.gov, checked Oct 23, 2026$176
Payroll service and tax return (estimate)$2,000
State corporate income taxrevisor.mn.gov, checked Oct 23, 2026$5,296
Federal corporate income tax (21%)irs.gov, 2026 rates$10,237
Federal income taxirs.gov, 2026 rates$4,564
State income taxrevenue.state.mn.us, checked Oct 23, 2026$3,815
Yearly cost$33,104
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 Minnesota

Electing S corp tax treatment for an LLC starts to pay in Minnesota 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 Minnesota can elect to pay the state's income tax itself, a pass-through entity tax of 9.85%, 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.state.mn.us.

ProfitSole propLLCLLC as S corpC corp
$30,000$5,854$5,854$7,615$8,113
$50,000$11,399$11,399$11,542$14,502
$75,000$18,711$18,711$16,068$22,784
$100,000$27,161$27,161$22,912$33,104
$150,000$45,717$45,717$38,123$55,704
$200,000$65,189$65,189$54,824$77,809
$300,000$110,114$110,114$91,548$123,632

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 Minnesota

LLCCorporation
Filing to form$155Articles of Organization (Chapter 322C)$155Articles of Incorporation (Chapter 302A)sos.mn.gov
Yearly reportAnnual Renewal, no feeAnnual Renewal, no feesos.mn.gov
Report dueDecember 31December 31
Minnesota minimum feeby a table of gross receiptsyesyesrevenue.state.mn.us

Not in the calculator: Minnesota has no city or county income taxes. Some cities and counties levy local sales and lodging taxes.

Switching calculators for Minnesota

By profession in Minnesota

Questions

Is an S corp worth it in Minnesota?

On these figures, from about $52,500 of profit. At $100,000 an LLC taxed as an S corp costs $22,912 a year against $27,161 for a plain LLC, $4,249 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 Minnesota?

The state charges Annual Renewal, no fee. LLCs can also owe Minnesota minimum fee. Forming one costs $155.

Does Minnesota recognise the S corp election?

Yes. The federal election carries over with no separate state form. Minnesota follows the federal S election. S corporations file Form M8 and pay the minimum fee.

What income tax does Minnesota charge?

Minnesota taxes personal income in 4 brackets, from 5.35% to 9.85% (2026, single filer). C corporations pay 9.8% of net income.

How this page models Minnesota (2)

Sources checked 2026-10-23. Each figure links to the state or IRS page it comes from.

Other states