LLC taxed as S corp vs S corporation in North Carolina: which costs less (2026)

At $100,000 profit in North Carolina, an LLC taxed as an S corp costs $21,115 a year in tax and fees and an S corporation costs $20,971. An S corporation starts to cost less from about $10,000 of profit.

$144 a year

saved by switching from an LLC taxed as an S corp to an S corporation in North Carolina, at these numbers.

Switching from an LLC taxed as an S corp to an S corporation starts to pay at about $10,000 of profit, with the same settings. As an S corporation this uses the state's pass-through entity tax election, which lowers the cost here.

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

Item	LLC as S corp	S corp	Change
Annual Reportsosnc.gov, checked Oct 23, 2026	$200	$18	−$182
Payroll tax on your salaryirs.gov, 2026 rates	$6,504	$6,504	$0
Payroll service and tax return (estimate)	$1,800	$1,800	$0
North Carolina franchise tax (S corporation)ncdor.gov, checked Oct 23, 2026	$200	$200	$0
North Carolina pass-through entity tax, paid by the company (elected)ncdor.gov, checked Oct 23, 2026	$2,169	$2,176	+$7
Federal income taxirs.gov, 2026 rates	$9,155	$9,186	+$31
State income tax, after the PTET exclusionncdor.gov, checked Oct 23, 2026	$1,087	$1,087	$0
Yearly cost	$21,115	$20,971	−$144

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 as S corp	S corp	Difference
$30,000	$7,589	$7,428	−$161
$50,000	$11,243	$11,084	−$159
$75,000	$14,545	$14,387	−$158
$100,000	$21,115	$20,971	−$144
$150,000	$35,356	$35,215	−$141
$200,000	$50,398	$50,257	−$141
$300,000	$82,990	$82,860	−$130

Federal and North Carolina tax and fees, single filer, revenue 1.5 times profit, default salary for S and C corps. "Difference" is S corporation minus LLC taxed as an S corp.

What the switch takes in North Carolina

File the Articles of Incorporation (Form B-01) with the state: $125 (fee).
Federal return each year: Form 1120-S, due March 15, plus your own Form 1040.
State upkeep each year: Annual Report, $18 a year, due 15th day of the 4th month after fiscal year end (April 15 for calendar year).

What changes between the two

Both are taxed the same way by the IRS once the election is made: salary with payroll tax, the rest as a distribution, one Form 1120-S. The difference is state law: an LLC files Articles of Organization (Form L-01) and Annual Report, $200 a year, a corporation files Articles of Incorporation (Form B-01) and Annual Report, $18 a year.

A corporation also has formalities an LLC skips: a board, bylaws, share records and yearly minutes. Most one-person businesses pick the LLC route for that reason.

Questions

How much does it save at $100,000 in North Carolina?

$144 a year: LLC taxed as an S corp $21,115, S corporation $20,971.

Is an LLC taxed as an S corp the same as an S corp?

For federal tax, yes. For North Carolina fees and paperwork, no: the LLC pays Annual Report, $200 a year and the corporation Annual Report, $18 a year.

More for North Carolina

Common cases in North Carolina

Other states