LLC vs S corp in New Jersey: which costs less (2026)

At $100,000 profit in New Jersey, a single-member LLC costs $26,143 a year in tax and fees and an LLC taxed as an S corp costs $22,793. An LLC taxed as an S corp starts to cost less from about $57,500 of profit.

$3,350 a year

saved by switching from a single-member LLC to an LLC taxed as an S corp in New Jersey, at these numbers.

Switching from a single-member LLC to an LLC taxed as an S corp starts to pay at about $57,500 of profit, with the same settings. As an LLC taxed as an S corp this uses the state's pass-through entity tax election, which lowers the cost here.

New Jersey, 2026: $100,000 profit, single filer

Item	LLC	LLC as S corp	Change
Annual Reportnj.gov, checked Oct 23, 2026	$75	$75	$0
Self-employment taxirs.gov, 2026 rates	$14,119	$0	−$14,119
Federal income taxirs.gov, 2026 rates	$8,223	$8,792	+$569
State income tax, after the PTET creditnj.gov, checked Oct 23, 2026	$3,726	$727	−$2,999
Payroll tax on your salaryirs.gov, 2026 rates	$0	$7,482	+$7,482
State disability and paid leavenj.gov, checked Oct 23, 2026	$0	$338	+$338
Payroll service and tax return (estimate)	$0	$1,800	+$1,800
New Jersey S corporation minimum tax (CBT)nj.gov, checked Oct 23, 2026	$0	$563	+$563
New Jersey pass-through entity tax, paid by the company (elected)nj.gov, checked Oct 23, 2026	$0	$3,016	+$3,016
Yearly cost	$26,143	$22,793	−$3,350

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	LLC	LLC as S corp	Difference
$30,000	$5,639	$8,182	+$2,543
$50,000	$10,806	$11,759	+$953
$75,000	$17,852	$15,565	−$2,287
$100,000	$26,143	$22,793	−$3,350
$150,000	$44,346	$38,292	−$6,054
$200,000	$63,135	$54,614	−$8,521
$300,000	$108,083	$89,221	−$18,862

Federal and New Jersey tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is LLC taxed as an S corp minus Single-member LLC.

What the switch takes in New Jersey

Check the business can elect: no more than 100 shareholders, all of them US citizens or residents (no nonresident alien owners), and one class of stock. IRS
File IRS Form 2553 to elect S corp tax treatment, within 2 months and 15 days of the start of the tax year it should apply to. See how the S corp election works.
New Jersey needs its own S election filing as well. A corporation (or LLC taxed as a corporation) must file Form CBT-2553 and receive approval to be an NJ S corporation; otherwise it is taxed as a C corporation under CBT. NJ S corporations pay the minimum tax.
Register with New Jersey as an employer and run payroll for your own salary: federal Forms 941 each quarter, Form 940 and a W-2 each year. New employers pay New Jersey unemployment tax at 2.683% on the first $44,800 of wages. nj.gov See what payroll costs.
Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
State upkeep each year: Annual Report, $75 a year, due Last day of the anniversary month of formation. New for you: New Jersey S corporation minimum tax (CBT).

What changes between the two

A plain LLC pays self-employment tax of 15.3% on 92.35% of all profit, up to the Social Security wage base of $184,500. Taxed as an S corp, the business pays you a salary, and only the salary carries Social Security and Medicare tax. The rest comes out as a distribution.

The election adds costs: a payroll service, a separate business tax return (Form 1120-S), federal and New Jersey unemployment tax on the salary, and New Jersey S corporation minimum tax (CBT). The calculator counts $1,800 a year for payroll and the return. The IRS expects a reasonable salary for the work, so it cannot be set near zero.

Questions

At what profit does an S corp election pay in New Jersey?

About $57,500 a year, on the default salary (40% of profit, at least $30,000 where profit allows) and $1,800 of yearly payroll and return costs. Change the salary in the calculator to see how the point moves.

How much does it save at $100,000 in New Jersey?

$3,350 a year: Single-member LLC $26,143, LLC taxed as an S corp $22,793.

Does New Jersey recognise the S corp election?

Yes. New Jersey needs its own election filing.

More for New Jersey

Common cases in New Jersey

Other states