Does Maryland recognize the federal S-corporation election?

Yes. Maryland 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 510 (Maryland Pass-Through Entity Income Tax Return).

Which Maryland return does an S corporation file?

Form 510 (Maryland Pass-Through Entity Income Tax Return).

S-corp election · MD

Maryland 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.

Maryland follows the federal S election. Filing IRS Form 2553 is enough — there is no separate Maryland election form. Maryland 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 Maryland 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 510 (Maryland Pass-Through Entity Income Tax 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 510. 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 Maryland

S corporations file Form 510 as pass-through entities. The PTE must pay Maryland tax on nonresident members' distributive shares, and a PTE may elect to be taxed at the entity level (electing PTE, Form 511) as a SALT-cap workaround.

Franchise or gross-receipts tax

Maryland has NO general corporate franchise tax. The $300 annual charge is the SDAT Annual Report filing fee (the same $300 applies to LLCs), not a franchise tax and not based on capital or paid-in stock. Maryland levies a separate public service company franchise tax only on regulated utilities.

Maryland corporation vs Maryland 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	$120	$100
Report cadence	Every year	Every year
Report fee	$300	$300

An LLC is $20 cheaper to file here. That is a one-off charge, so it should not decide the entity type on its own.

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

How Maryland 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. Maryland 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 510 (Maryland Pass-Through Entity Income Tax Return).
: S corporations file Form 510 as pass-through entities. The PTE must pay Maryland tax on nonresident members' distributive shares, and a PTE may elect to be taxed at the entity level (electing PTE, Form 511) as a SALT-cap workaround.
: Form 510 (Maryland Pass-Through Entity Income Tax Return).

Where these numbers come from

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