Excellent
7,486 reviews
Before going into the details, here is your quick checklist for starting an S Corp in Georgia.
Business Entity: You must have an active Georgia LLC or C corporation registered with the Georgia Secretary of State Corporations Division before electing S corp status.
Shareholder Limit: No more than 100 shareholders or members are allowed at any time.
Eligible Shareholders: Shareholders must be U.S. citizens or resident aliens. Partnerships, other corporations, and non-resident aliens are not eligible without a consent agreement.
One Class of Stock: Your business can only issue one class of stock. Preferred stock arrangements are not permitted under S Corp status.
IRS Form 2553: File the S Corp election form with the IRS within the required timeframe after forming your entity. [1]
Georgia Form 600S: Georgia requires S corporations to file a separate state return, Form 600S, with the Georgia Department of Revenue each year by March 15.
Georgia Net Worth Tax: Corporations with a net worth exceeding $100,000 must pay an annual tax based on a graduated scale ranging from $125 to $5,000. This is calculated on the prior year’s ending balance sheet and is filed as part of the annual Form 600S (due March 16 for the 2026 tax year).
Nonresident Shareholder Consent: Any nonresident shareholder must execute Form 600S-CA, agreeing to pay Georgia income tax on their proportionate share of the corporation's Georgia taxable income. If this agreement is not filed, Georgia may terminate the S corp election for state purposes.
Annual Registration: File your annual registration with the Georgia Secretary of State each year to keep your entity in good standing. LLCs and Corporations are due by April 1. The filing window is between January 1 and April 1 each year.
An S corporation is a federal tax classification under Subchapter S of the Internal Revenue Code. It is not a standalone business structure.
An eligible Georgia LLC or C corporation files IRS Form 2553 to request S corp status. Once approved, the business does not pay federal corporate income tax on its profits. Instead, income and losses pass through directly to shareholders' personal tax returns, where they are taxed at the individual level.
To start an S corporation in Georgia, you first form a business entity through the Georgia Secretary of State Corporations Division. After your entity is active, you file Form 2553 with the IRS within the required deadline. Then you register with the Georgia Department of Revenue and file Form 600S each year at the state level.
Georgia's tax treatment of S corporations is unique. Shareholders pay a flat personal income tax of 5.19% (for the 2026 tax year) on their share of pass-through income. Additionally, Georgia imposes a net worth tax, though corporations with a net worth of $100,000 or less are exempt. For those above $100,000, the tax scales from $125 up to $5,000. Georgia also allows an optional Pass-Through Entity (PTE) tax election, which can offer federal tax advantages for many S corp owners.
Filing Form 2553 on time is one of the most important steps in the process. Miss the window and your election will not take effect until the following tax year.
| Scenario | Deadline | Effective Tax Year |
|---|---|---|
| Existing business, calendar year | March 16, 2026 | 2026 |
| New business formed January 15, 2026 | April 1, 2026 | 2026 |
| New business formed June 1, 2026 | August 15, 2026 | 2026 |
| Filed during prior year (2025) | December 31, 2025 | 2026 |
For existing calendar-year businesses, IRS rules require you to file Form 2553 by the 15th day of the third month of the tax year. In 2026, March 15 falls on a Sunday, so the deadline shifts to March 16, 2026.
New businesses have 2 months and 15 days from their formation date to file. Miss that window, and you will need to request a late election with a reasonable cause statement, or wait until the following tax year for the election to take effect.
If you wanted your S corp election to take effect at the start of 2026, you could have filed Form 2553 at any point during calendar year 2025. For all 2026 filings, use the deadlines above.
LLC members who do not elect S corp status pay self-employment tax (15.3%) on all net profits from the business. With an S corp election, you split your income between a W-2 salary and distributions. Only your salary is subject to payroll taxes. Distributions are not, which can produce meaningful savings at higher income levels.[2]
As an S Corp owner, you pay yourself a reasonable salary for the work you do in the business. Any remaining profits can then be taken as distributions. Distributions are not subject to self-employment taxes, which allows you to keep more of what your business earns while staying fully compliant with IRS requirements.
The Tax Cuts and Jobs Act allows qualifying S corp owners to deduct up to 20% of their qualified business income (QBI) from their personal tax returns under Section 199A. Distributions from an S corp may qualify for this deduction, reducing your taxable income further. W-2 salary payments do not qualify, so structuring your compensation correctly matters. [3]
Georgia taxes shareholder income at the individual level, currently at 5.19%. Because S corp distributions are not subject to self-employment tax, the total tax burden on Georgia S corp owners is still lower than it would be under a standard LLC structure at the same profit level. The Georgia individual income tax rate is also on a scheduled downward path, which makes this structure increasingly favorable over time.
Electing S corp status does not change your LLC's legal structure, operating agreement, or management setup. Your members run the business exactly as before. You keep the same liability protection and operational control. The only change is how the IRS and Georgia treat your business income for tax purposes, not how Georgia recognizes your legal entity.
A C corporation pays Georgia corporate income tax (5.19%) on its profits at the entity level. When those profits are distributed to shareholders as dividends, shareholders pay income tax a second time on their personal returns. An S corp election eliminates this second layer at the corporate level. Profits pass through directly to shareholders and are only taxed once at the individual level.
S corp shareholders can deduct business losses on their personal tax returns, up to the amount of their basis in the company. C corporation shareholders have no equivalent benefit; losses stay at the corporate level. This pass-through of losses is particularly valuable during startup years or periods of lower revenue.
C corporations that retain earnings beyond reasonable business needs may be subject to the IRS accumulated earnings tax. S corporations avoid this penalty because profits pass through to shareholders each year rather than accumulating at the entity level. This gives Georgia S Corp owners more flexibility in how they manage earnings without triggering additional federal tax exposure.
C corporations file Form 1120 and manage corporate-level taxes separately from their shareholders' personal returns. S corporations file IRS Form 1120-S and Georgia Form 600S, and each shareholder receives a Schedule K-1 reporting their share of income or loss. Many business owners find the S corp pass-through structure more manageable at tax time compared to maintaining separate corporate and personal tax layers.
Selling a C corporation can trigger taxation at two levels: the corporation pays tax on the gain from an asset sale, and shareholders pay tax again on distributions. An S corp election can allow a sale to be structured in a way that avoids this double layer of tax on the gain, potentially increasing after-tax proceeds when Georgia business owners plan an exit or ownership transfer.
An S corp is a tax classification, not a standalone entity. You must have an active Georgia LLC or C corporation registered with the state before you can file your IRS election. Here is how the full process works.
If you do not already have a registered Georgia business entity, your first step is to form one. Choose the structure that fits your business goals. An LLC is simpler to maintain and works well for most small business owners. A C corporation is a better fit if you need to attract investors or issue multiple classes of stock.
Forming an LLC before your S Corp election is the most common path. Georgia LLC filings go through the Georgia Secretary of State Corporations Division. Here are the key steps:
For a full walkthrough of each step, visit our How to Start an LLC in Georgia guide.
If you need a corporate structure before your S Corp election, here are the steps to form a C Corp in Georgia:
For a complete walkthrough, visit our How to Start a C Corporation in Georgia guide.
Already have an active Georgia LLC or C corporation? Skip directly to Step 2.
Once your Georgia LLC or C corporation is active, you file IRS Form 2553, the Election by a Small Business Corporation, to officially request S corp tax treatment from the IRS. This single form changes how the federal government taxes your business income from that point forward.
Form 2553 collects the following information:
All shareholders must sign the consent portion of the form before it is submitted. An unsigned form will be rejected by the IRS.
You can submit Form 2553 by mail or fax. There is no filing fee.
Mail address for Georgia businesses: Department of the Treasury Internal Revenue Service Kansas City, MO 64999
Fax number for Georgia businesses: 855-887-7734 [4]
Faxing is typically faster than mailing. Keep your fax confirmation receipt. The IRS will send a CP261 acceptance notice to confirm your S corporation election. If your election is not accepted, you will receive a letter explaining the issue. [5]
If you file after the standard deadline, you may still be eligible for a late election under IRS Revenue Procedure 2013-30, provided you meet certain requirements. See the section below on what to do if you miss the deadline.
Unlike Texas and Florida, Georgia requires S corporations to take additional state-level steps beyond the federal election. Once the IRS approves your Form 2553, you need to register with the Georgia Department of Revenue and comply with Georgia's specific S corp tax requirements.
Register your S corp through the Georgia Tax Center (GTC). During registration, you will set up your business tax accounts for income withholding, sales and use tax (if applicable), and employer tax obligations.
Georgia S corporations file Form 600S, the S Corporation Tax Return, with the Georgia Department of Revenue each year. For calendar-year S Corps, this return is due by March 15. This form reports the corporation's Georgia net income (or loss) and calculates the net worth tax.
Form 600S also includes an option to elect the Pass-Through Entity Tax (PTET). Under this optional election, the S corporation can pay Georgia income tax at the entity level (currently 5.19%) rather than passing the obligation to individual shareholders. Shareholders who have income taxed at the entity level receive a corresponding credit on their personal returns. This election must be made annually on Form 600S.
If any of your shareholders are Georgia nonresidents, each one must execute Form 600S-CA. This is a consent agreement in which the nonresident shareholder agrees to pay Georgia income tax on their proportionate share of the S corporation's Georgia taxable income. Georgia law requires this agreement to be filed with Form 600S in the first year your S corp files a Georgia return, and again for any new nonresident shareholders added in later years.
If a nonresident shareholder does not execute Form 600S-CA, Georgia may terminate your S corp election for state income tax purposes and treat the entity as a C corporation, which means the corporation would then owe Georgia corporate income tax at 5.19%.
Georgia imposes a net worth tax on all corporations, including those taxed as S corporations for federal purposes. This is separate from income tax and applies based on the company's paid-in capital, not its revenue or profit.
The net worth tax applies based on the prior year's net worth calculation. It is not a tax on income, so it is owed regardless of whether the business was profitable in a given year. For most small S corps in Georgia, this results in a modest flat payment.
Once your S corp election takes effect, IRS rules require you to pay yourself a W-2 salary if you work in the business. This is not optional. Owner-employees of S corporations cannot simply take all their compensation as distributions.
The IRS expects your salary to reflect what someone performing similar work, in the same industry, and in the same region would typically earn. There is no fixed formula, but the IRS flags S corps where owner salaries appear unusually low relative to distributions.
Setting your salary too low risks the IRS reclassifying distributions as wages, which would make them subject to payroll taxes. Setting it too high means you are paying more in payroll taxes than necessary.
Payroll adds ongoing administrative requirements to your business.
Every S corporation files its own federal tax return each year using IRS Form 1120-S. This is a separate return from your personal Form 1040, and it is due by March 16, 2026, for calendar-year S corporations (March 15 falls on a Sunday in 2026). Each shareholder receives a Schedule K-1 showing their individual share of income or loss, which they use to complete their personal federal tax returns.
Georgia S corporations file Form 600S with the Georgia Department of Revenue by March 15 each year for calendar-year filers. This return reports Georgia net income, calculates the net worth tax, and includes Schedule K-1 equivalents for each shareholder. Extensions are available using Georgia Form IT-303, but an extension to file does not extend your time to pay. Any tax owed is due by the original deadline.
Once your S corp is active, there are ongoing requirements to stay in good standing. Here is what applies specifically to Georgia S corporations.
S corporations file Form 1120-S with the IRS each year by March 15 for calendar-year filers (March 16 in 2026 because March 15 falls on a Sunday). This returns Schedule K-1 to each shareholder. A six-month extension is available by filing IRS Form 7004 by the original deadline, moving the filing deadline to September 15, 2026, but this does not extend your time to pay any tax owed. [7]
Your Georgia S corp must file Form 600S with the Georgia Department of Revenue by March 15 each year. This return reports Georgia's net income and net worth. Missing this deadline can result in penalties and interest on unpaid tax. If your S corp has nonresident shareholders, make sure Form 600S-CA is attached.
If your S corporation's net worth exceeds $100,000, the net worth tax is owed alongside Form 600S. The tax is graduated based on paid-in capital, with a maximum of $5,000 per year. Even if no tax is owed, the net worth portion of Form 600S must still be filed.
All Georgia LLCs must file an annual registration with the Georgia Secretary of State by April 1 each year. Corporations must file by March 1. The filing fee is $60 ($50 base plus a $10 service fee). Failure to file can result in the administrative dissolution of your entity.
The IRS requires S corp owner-employees to receive a reasonable salary for work performed in the business. This salary is subject to payroll taxes. The IRS scrutinizes compensation levels in S Corp audits. Underpaying yourself to maximize distributions is one of the most common compliance issues the IRS reviews.
S Corp owners who work in the business must be on the payroll. Federal employment taxes are deposited on a quarterly schedule using Form 941. If your Georgia S corp has employees, you must also register with the Georgia Department of Labor for unemployment insurance and remit withholding taxes to the Georgia Department of Revenue using Form G-7.
S corporations in Georgia that are formed as corporations must hold annual shareholder meetings, maintain minutes from all director and shareholder meetings, and keep a current record of all stockholders. LLCs that elect S corp status have fewer mandatory formalities, but maintaining clean records is still important for compliance and liability protection.
Georgia does not require a general state business license, but many industries require licenses or permits through the Georgia Secretary of State or other state boards and agencies. Check your county and city requirements as well.
Missing the IRS filing deadline does not automatically end your options. The IRS provides a path for late elections under Revenue Procedure 2013-30, as long as certain conditions are met.
To qualify for late election relief, your business must meet the following:
If you miss the March 16, 2026, deadline for the current tax year, your S corp election may still apply to 2026 if you file with a valid, reasonable cause explanation.
For LLCs filing a late election, you may also need to file IRS Form 8832 (Entity Classification Election) alongside Form 2553. This step is required when an LLC needs to first elect corporate tax treatment before the S corp designation can apply.
Late elections involve additional IRS review. Many business owners work with a formation service or tax professional to make sure the paperwork is complete and the reasonable cause statement is properly written before submission.
Circumstances change. There may come a point when S corp status no longer fits your business, and revoking the election is the right move.
To revoke the election, shareholders holding more than 50% of the company's stock must file a written revocation statement with the IRS service center where Form 2553 was originally submitted. There is no IRS form for this. It is a letter sent to the same Ogden, UT address used for Form 2553.
File the revocation on or before March 16 of the current tax year (for calendar-year businesses), and it takes effect for that year. File it after that date, and the revocation takes effect the following year.
Once an S corp election is revoked, the entity generally cannot re-elect S corp status for five years without IRS consent.
Georgia Secretary of State, eCorp Portal: Online portal for filing documents, searching business entities, and paying annual registration fees
Georgia Department of Revenue, S Corporations FAQ: State-level guidance on Form 600S, nonresident shareholder consent, and net worth tax
Georgia Department of Labor, Employer Registration: Register for Georgia unemployment insurance tax if your S corp has employees
Georgia Small Business Development Center (SBDC): Free advising, training, and resources for Georgia small business owners
U.S. Small Business Administration, Georgia District Office: Federal loans, grants, and business development programs for Georgia businesses
IRS, Form 2553 Filing Instructions: Official instructions and deadlines for the S Corp election form
IRS, Free EIN Application: Apply for your federal Employer Identification Number at no charge
USPTO, Federal Trademark Registration: Protect your business name and brand at the federal level
