Lesson 9 of 11
State-level differences
The federal election is only half the picture. States set their own rules.
Common variations
- Some states follow the federal election automatically
- Some require a separate state-level election
- Some impose an entity-level tax, franchise tax or minimum fee on S corporations
- Some require withholding or composite returns for non-resident shareholders
Multi-state owners
If the company operates in several states, income is apportioned and shareholders may face filing obligations in more than one state. Check this before electing if you work across state lines.
Not sure whether the election fits?
The numbers depend on your profit, your role in the business and your state. Gullia Filing's tax team reviews your position, prepares Form 2553 where it makes sense, and sets up payroll so the election holds up.