Kentucky S-Corporation Election

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

Kentucky follows the federal S election. Filing IRS Form 2553 is enough. There is no separate Kentucky election form. Kentucky is one of 42 states that follow the federal election with no state form of their own.
S corporation facts for Kentucky: the state recognizes the federal S election for state tax purposes. Incorporating costs $40 to file. The annual report fee is $15.
Kentucky recognizes the federal S election for state tax purposes; filing IRS Form 2553 is the federal step. Source: MyStateLLC 50-state S-corp election dataset, compiled from state filing offices and revenue departments, July 2026; any figure we could not confirm is labeled on the page.
State treatmentFollows the federal election
Separate state formNot required
State corporate income taxYes

Does Kentucky recognize the federal S election?

State treatment of the S election

Follows the federal electionYes
Separate state election formNone required
State returnForm 720S (Kentucky S Corporation Income Tax and LLET Return)

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 720S. Of the 50 states, 42 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 Kentucky

S corporations owe the LLET at the entity level (minimum $175), reported on Form 720S, even though income otherwise passes through to shareholders. Kentucky also allows an elective pass-through entity tax.

Franchise or gross-receipts tax

Kentucky has no separate corporation franchise tax; instead it imposes the Limited Liability Entity Tax (LLET) on corporations, LLCs, S corps and LPs. LLET minimum is $175 for entities with gross receipts or gross profits of $3 million or less; above that it is the lesser of 0.095% of Kentucky gross receipts or 0.75% of Kentucky gross profits.

Kentucky corporation vs Kentucky 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.

 CorporationLLC
Formation filing fee$40$40
Report cadenceEvery yearEvery year
Report fee$15$15
Entity-level tax on the LLC sideN/ALimited Liability Entity Tax (LLET)

Both entities cost $40 to file in Kentucky, so the filing fee is not a reason to pick one over the other.

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

How Kentucky compares

State treatment of the federal S electionStates
Follows the federal election, no state form needed42
No corporate income tax, so no state election exists5
Has a corporate income tax and does not follow the election. The corporation is taxed like a C corporation2
Follow the election but still impose some entity-level tax on the S corporation, California, Illinois, New York, Massachusetts and Delaware among themN/A
Require a separate state election form as well1

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

Frequently Asked Questions

Where these numbers come from

This page covers how Kentucky treats the federal S-corporation election and what an S corporation still owes the state. Every figure was checked against Kentucky'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:

  1. https://revenue.ky.gov/Business/Corporation-Income-and-Limited-Liability-Entity-Tax/Pages/default.aspx
  2. https://www.sos.ky.gov/bus/business-filings/Pages/Fees.aspx
  3. https://www.sos.ky.gov/bus/business-filings/Pages/default.aspx
  4. https://www.sos.ky.gov/bus/business-filings/Pages/Annual-Reports.aspx
  5. Kentucky statute: KRS 136.060 (organization tax on authorized shares)

This guide is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. It describes rules that can differ from state to state, and fees, rates, forms and deadlines can change after we review them. It cannot tell you what applies to your own business: that turns on where the business is formed, where it operates and how it is taxed. Confirm anything you rely on with the state or federal agency concerned, or with a licensed attorney or CPA, before you act on it.

Related guides

S-corp election by stateAll 50 states compared in one table →S-corp salary calculatorModel the self-employment tax saving against payroll cost →LLC vs. S-CorpPass-through taxation compared →Reasonable compensationWhat an S-corp owner must pay themselves →Corporation fees by stateFiling fees, report cadence and corporate income tax →
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Edmond Hui

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.

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