How to elect S-Corp status in Pennsylvania

An S-Corporation election in Pennsylvania can save self-employed business owners thousands in self-employment tax. The federal deadline is April 15 (Form 2553). Pennsylvania state-level tax treatment is 8.49% flat. We file the federal election and any required Pennsylvania forms for No state-fee markup.

An S-Corp election in Pennsylvania typically makes sense when:

• Your business net profit is roughly $40,000 or more per year
• You can pay yourself a reasonable salary plus take distributions
• You are willing to run payroll (required for S-Corp owners)
• You file your S-Corp tax return by April 15 each year

The savings come from splitting your income between W-2 wages (subject to FICA) and S-Corp distributions (not subject to self-employment tax). Use our S-Corp savings calculator to see your specific number.

1. Have an eligible entity. Your Pennsylvanian LLC or C-Corporation must already exist. Form an LLC or form a corporation first if needed.
2. Confirm eligibility. All shareholders must be US persons (no corporations, partnerships, or foreign nationals), and you must have 100 or fewer shareholders.
3. File IRS Form 2553. Submit within 2 months and 15 days of the tax year you want the election to take effect, or by March 15 of the current year.
4. Check Pennsylvania state requirements. Some states require a separate state-level election. Pennsylvania's tax treatment is 8.49% flat.
5. Set up payroll. S-Corp owners must take a reasonable salary subject to payroll tax. Our payroll partners handle setup.
6. File annual S-Corp returns. Form 1120-S federally and Pennsylvania state returns by April 15 each year.