Does Arizona recognize the federal S-corporation election?

Yes. Arizona follows the federal S election, and no separate state election form is required — filing federal Form 2553 with the IRS is enough. The corporation does still file Form 120S (Arizona S Corporation Income Tax Return), due the 15th day of the 3rd month after year-end (March 15 for calendar-year filers).

Which Arizona return does an S corporation file?

Form 120S (Arizona S Corporation Income Tax Return), due the 15th day of the 3rd month after year-end (March 15 for calendar-year filers).

S-corp election · AZ

Arizona S-Corporation Election

By Edmond Hui · Facts verified July 29, 2026 against primary state sources

Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.

Arizona follows the federal S election. Filing IRS Form 2553 is enough — there is no separate Arizona election form. Arizona is one of 43 states that follow the federal election with no state form of their own.

State treatmentFollows the federal election

Separate state formNot required

State corporate income taxYes

Does Arizona recognize the federal S election?

State treatment of the S election

Follows the federal election	Yes
Separate state election form	None required
State return	Form 120S (Arizona S Corporation Income Tax Return), due the 15th day of the 3rd month after year-end (March 15 for calendar-year filers)

No separate state election to file: the federal election on IRS Form 2553 carries over. That is the election only — the corporation still files Form 120S. Of the 50 states, 43 follow the federal election with no state form of their own, and 1 more — New York — recognizes S status but requires an election of its own as well.

What an S corporation still owes Arizona

Arizona imposes no entity-level income tax on an S corporation's ordinary pass-through income (income flows to shareholders' Arizona returns). The S corporation is taxed only on items taxed at the federal level — excess net passive income and built-in gains (Form 120S, Part 1). Arizona also offers an OPTIONAL entity-level Pass-Through Entity (PTE) tax, elected on Form 120S, at Arizona's flat 2.5% individual rate. The $50 corporate minimum tax applies to C corporations (Form 120).

Arizona corporation vs Arizona LLC

State filing charges only. Corporate income tax and franchise tax are excluded because both depend on income or net worth, so no flat figure exists for either entity.

	Corporation	LLC
Formation filing fee	$60	$50
Report cadence	Every year	Not required
Report fee	$45	No report required

An LLC is $10 cheaper to file here. That is a one-off charge, so it should not decide the entity type on its own.

Full Arizona LLC cost breakdown · LLC vs C-corp explained · LLC vs S-corp explained

How Arizona compares

State treatment of the federal S election	States
Follows the federal election, no state form needed	43
No corporate income tax, so no state election exists	4
Has a corporate income tax and does not follow the election — the corporation is taxed like a C corporation	2
Follow the election but still impose some entity-level tax on the S corporation — California, Illinois, New York, Massachusetts and Delaware among them	—
Require a separate state election form as well	1

Compare all 50 states · LLC vs S-corp · S-corp salary and savings calculator

Frequently Asked Questions

: Yes. Arizona follows the federal S election, and no separate state election form is required — filing federal Form 2553 with the IRS is enough. The corporation does still file Form 120S (Arizona S Corporation Income Tax Return), due the 15th day of the 3rd month after year-end (March 15 for calendar-year filers).
: Arizona imposes no entity-level income tax on an S corporation's ordinary pass-through income (income flows to shareholders' Arizona returns). The S corporation is taxed only on items taxed at the federal level — excess net passive income and built-in gains (Form 120S, Part 1). Arizona also offers an OPTIONAL entity-level Pass-Through Entity (PTE) tax, elected on Form 120S, at Arizona's flat 2.5% individual rate. The $50 corporate minimum tax applies to C corporations (Form 120).
: Form 120S (Arizona S Corporation Income Tax Return), due the 15th day of the 3rd month after year-end (March 15 for calendar-year filers).

Where these numbers come from

This page covers how Arizona treats the federal S-corporation election and what an S corporation still owes the state. Every figure was checked against Arizona's own published sources on July 29, 2026— the state business filing agency's fee schedule, the governing statute, and where a state tax applies, the state Department of Revenue. Commercial formation-service pages were used as leads only and are never cited. Anything the review could not confirm from an official source is left blank on this page rather than filled with an estimate.

Corporate income tax and franchise tax are quoted as the state publishes them, as rate schedules and thresholds, and are excluded from every dollar total here. They depend on income or net worth, so there is no flat figure that would be true for every corporation.

Primary sources: