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Start your S Corp at $0 + state filing fees
Before going into the details, here is your quick checklist for starting an S Corp in New Hampshire.
Business Entity: You must have an active New Hampshire LLC or C corporation registered with the New Hampshire Secretary of State 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.
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]
No Separate New Hampshire Election Required: New Hampshire does not require a separate state-level S Corp election. However, the state does not recognize the federal election for state tax purposes.
New Hampshire Business Profits Tax (BPT): Your S Corp must file a BPT return if its gross business income exceeds $109,000. The rate is 7.5% on taxable business profits. Because NH doesn't recognize the S Corp "pass-through" for state taxes, the entity pays this directly.
New Hampshire Business Enterprise Tax (BET): S corporations with more than $298,000 in gross receipts or an enterprise value tax base above $298,000 must also file a BET return at a rate of 0.55% for 2026 on the enterprise value tax base.
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 New Hampshire 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 New Hampshire, you first form a business entity, either an LLC or a C corporation, through the New Hampshire Secretary of State. After your entity is active, you file Form 2553 with the IRS within the required deadline.
New Hampshire's approach to S corporations differs from most other states. While the IRS recognizes your S corp election for federal tax purposes, the New Hampshire Department of Revenue Administration (DRA) does not. The state treats S corporations the same as C corporations under its Business Profits Tax and Business Enterprise Tax. This means your S corp pays state-level business taxes at the entity level, with pass-through income then not taxed again on shareholders' personal New Hampshire returns, since New Hampshire has no personal income tax.
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. These federal savings are real even in New Hampshire, where the state taxes your S corp at the entity level regardless of your federal election. [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]
New Hampshire eliminated its Interest and Dividends Tax, and the state has no broad-based personal income tax. S corp distributions that pass through to shareholders are not subject to an additional state-level personal income tax. The BPT applies at the entity level, and individual shareholders do not owe a separate New Hampshire income tax on pass-through income they receive. This removes one tax layer that shareholders in many other states face.
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 treats your business income, not how the state recognizes your legal entity.
A C corporation pays federal income tax on its profits at the corporate 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 federal second tax layer. Profits pass through directly to shareholders and are only taxed once at the federal level. Note that New Hampshire still applies the BPT and BET at the entity level regardless of S corp status.
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, as 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 New Hampshire 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 Form 1120-S, 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 the federal level compared to maintaining separate corporate and personal tax layers. Keep in mind that New Hampshire S Corps files Form NH-1120 and Form DP-120 at the state level regardless of federal elections.
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 federal tax on the gain, potentially increasing after-tax proceeds when New Hampshire business owners plan an exit or ownership transfer.
An S corp is a tax classification, not a standalone entity. You must have an active New Hampshire 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 New Hampshire 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. All New Hampshire LLC filings go through the New Hampshire Secretary of State. Here are the key steps:
For a full walkthrough of each step, visit our How to Start an LLC in New Hampshire guide.
If you need a corporate structure before your S Corp election, here are the steps to form a C Corp in New Hampshire:
For a complete walkthrough, visit our How to Start a C Corporation in New Hampshire guide.
Already have an active New Hampshire LLC or C corporation? Skip directly to Step 2.
Once your New Hampshire 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.
New Hampshire does not require a separate state-level S corp election with the Secretary of State or the Department of Revenue Administration. However, be aware that the state will continue to treat your entity as a corporation for BPT and BET purposes, filing Form NH-1120 and the required DP-120 each year.
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 New Hampshire businesses: 1Department of the Treasury Internal Revenue Service, Kansas City, MO 64999
Fax number for New Hampshire businesses: 855-887-7734 [4]
Faxing is 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.
This step is specific to New Hampshire and important to plan for before you elect S corp status. Unlike most states, New Hampshire does not recognize the federal S corporation election for state tax purposes. The New Hampshire Department of Revenue Administration treats S corporations the same as C corporations. Your S corp must comply with the state's two main business taxes.
The BPT applies to all business organizations conducting activity in New Hampshire with gross business income above $109,000; the BPT rate is 7.5% for 2026.
New Hampshire S corporations must complete Form DP-120, Computation of S Corporation Gross Business Profits, and attach it to their BPT return (Form NH-1120). Returns are due by April 15 for calendar-year filers.
If you pay 100% of your estimated BPT and BET by the original due date, New Hampshire grants an automatic seven-month extension to file. The extension is for filing only. Payment is still due by April 15. [6]
The BET applies at a rate of 0.55% on the enterprise value tax base (compensation, interest, and dividends paid). For 2026, the filing threshold is $298,000 in gross business receipts or an enterprise value tax base exceeding $298,000. BET paid acts as a credit against BPT owed for the same year; any unused credit may be carried forward for up to 10 taxable periods.
As of January 1, 2025, New Hampshire has fully repealed the Interest & Dividends Tax. Consequently, S corporations are no longer required to file Form DP-9, and New Hampshire shareholders are no longer taxed at the state level on distributions received from the corporation.
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.
New Hampshire does not impose a state income tax withholding requirement on wages, since the state has no personal income tax on earned income. However, if your S corp has employees, you are still required to register with NHES for unemployment insurance contributions and remit those on schedule.
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. 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.
New Hampshire S corporations file the following state-level returns each year:
Late filing of any New Hampshire business tax return triggers a penalty of 5% per month, up to a maximum of 25%.
Your New Hampshire LLC or corporation must also file an annual report with the Secretary of State each year between January 1 and April 1. A late fee of $50 applies to reports filed after April 1. Failing to file for two consecutive years can result in the administrative dissolution of your entity.
Once your S corp is active, there are ongoing requirements to stay in good standing. Here is what applies specifically to New Hampshire S corporations.
S corporations file Form 1120-S with the IRS each year by March 15 for calendar-year filers. In 2026, March 15 falls on a Sunday, so the deadline shifts to March 16. This return reports total income, deductions, and credits, and issues Schedule K-1 to each shareholder. A six-month extension is available by filing IRS Form 7004 by the original deadline. The extension moves the filing deadline to September 15, 2026, but does not extend the time to pay any tax owed. [8]
Your S corp must file Form NH-1120 and Form DP-120 with the New Hampshire DRA by April 15 for calendar-year filers. If your S corp exceeds the BET filing thresholds, Form BET is due the same day. All S Corps must file Form BT-Summary. If 100% of the estimated tax due is paid by April 15, the state automatically grants a seven-month extension to file the return.
Your underlying New Hampshire LLC or corporation must file its annual report with the Secretary of State each year by April 1. Missing this deadline results in a $50 late fee and puts your entity at risk of administrative dissolution if the filing is missed for two consecutive years.
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 New Hampshire S corp has employees, you must register with New Hampshire Employment Security for unemployment insurance and remit contributions on schedule.
New Hampshire does not require a general state business license, but many industries require licenses through the New Hampshire Office of Professional Licensure and Certification (OPLC) or other state 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.
