StructureCost2026

North Carolina: what each business structure costs a year

At $100,000 profit, an S corporation costs $4,593 a year less than a sole proprietorship in North Carolina. All figures are 2026 tax and fees.

$4,593 a year

less as an S corporation than as a sole proprietorship in North Carolina, at these numbers. That includes the state's pass-through entity tax election.

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

North Carolina, 2026: $100,000 profit, single filer

StructureYearly costvs yoursTo set up
Sole proprietorship yours $25,564 $0
Itemized: $25,564
Self-employment taxirs.gov, 2026 rates$14,130
Federal income taxirs.gov, 2026 rates$8,235
State income taxncdor.gov, checked Oct 23, 2026$3,199
Yearly cost$25,564
Single-member LLC $25,695 +$131 $125
Itemized: $25,695
Annual Reportsosnc.gov, checked Oct 23, 2026$200
Self-employment taxirs.gov, 2026 rates$14,101
Federal income taxirs.gov, 2026 rates$8,202
State income taxncdor.gov, checked Oct 23, 2026$3,192
Yearly cost$25,695
LLC taxed as an S corp $21,115 −$4,449 $125
Itemized: $21,115
Annual Reportsosnc.gov, checked Oct 23, 2026$200
Payroll tax on your salaryirs.gov, 2026 rates$6,504
Payroll service and tax return (estimate)$1,800
North Carolina franchise tax (S corporation)ncdor.gov, checked Oct 23, 2026$200
North Carolina pass-through entity tax, paid by the company (elected)ncdor.gov, checked Oct 23, 2026$2,169
Federal income taxirs.gov, 2026 rates$9,155
State income tax, after the PTET exclusionncdor.gov, checked Oct 23, 2026$1,087
Yearly cost$21,115
S corporation lowest $20,971 −$4,593 $125
Itemized: $20,971
Annual Reportsosnc.gov, checked Oct 23, 2026$18
Payroll tax on your salaryirs.gov, 2026 rates$6,504
Payroll service and tax return (estimate)$1,800
North Carolina franchise tax (S corporation)ncdor.gov, checked Oct 23, 2026$200
North Carolina pass-through entity tax, paid by the company (elected)ncdor.gov, checked Oct 23, 2026$2,176
Federal income taxirs.gov, 2026 rates$9,186
State income tax, after the PTET exclusionncdor.gov, checked Oct 23, 2026$1,087
Yearly cost$20,971
C corporation $28,856 +$3,292 $125
Itemized: $28,856
Annual Reportsosnc.gov, checked Oct 23, 2026$18
Payroll tax on your salaryirs.gov, 2026 rates$6,504
Payroll service and tax return (estimate)$2,000
North Carolina franchise tax (C corporation)ncdor.gov, checked Oct 23, 2026$200
State corporate income taxncdor.gov, checked Oct 23, 2026$1,087
Federal corporate income tax (21%)irs.gov, 2026 rates$11,183
Federal income taxirs.gov, 2026 rates$5,098
State income taxncdor.gov, checked Oct 23, 2026$2,766
Yearly cost$28,856
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 North Carolina

Electing S corp tax treatment for an LLC starts to pay in North Carolina 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 North Carolina can elect to pay the state's income tax itself, a pass-through entity tax of 3.99%, and the owner gets that income left out of the personal return. 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 totalncdor.gov.

ProfitSole propLLCLLC as S corpC corp
$30,000$5,785$5,935$7,589$7,837
$50,000$11,077$11,224$11,243$13,146
$75,000$17,767$17,914$14,545$19,563
$100,000$25,564$25,695$21,115$28,856
$150,000$42,660$42,793$35,356$48,727
$200,000$60,338$60,487$50,398$67,783
$300,000$102,970$103,035$82,990$107,435

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 North Carolina

LLCCorporation
Filing to form$125Articles of Organization (Form L-01)$125Articles of Incorporation (Form B-01)sosnc.gov
Yearly reportAnnual Report, $200 a yearAnnual Report, $18 a yearsosnc.gov
Report dueApril 15 each year after the year of formation15th day of the 4th month after fiscal year end (April 15 for calendar year)
North Carolina franchise tax (S corporation)$200if taxed as S corpS corp onlyncdor.gov
North Carolina franchise tax (C corporation)$200noC corp onlyncdor.gov

Not in the calculator: No local income taxes in North Carolina. Counties tax business personal property (equipment, listed each January), not modelled.

Switching calculators for North Carolina

By profession in North Carolina

Questions

Is an S corp worth it in North Carolina?

On these figures, from about $52,500 of profit. At $100,000 an LLC taxed as an S corp costs $21,115 a year against $25,695 for a plain LLC, $4,580 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 North Carolina?

The state charges Annual Report, $200 a year. Forming one costs $125.

Does North Carolina recognise the S corp election?

Yes. The federal election carries over with no separate state form. North Carolina follows the federal S election; S corporations file CD-401S and pay franchise tax but no income tax at entity level.

What income tax does North Carolina charge?

North Carolina taxes personal income at a flat 3.99% (2026). C corporations pay 2% of net income.

How this page models North Carolina (1)

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

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