Does New Mexico recognize the federal S-corporation election?

Yes. New Mexico 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 S-Corp (New Mexico Sub-Chapter S Corporate Income and Franchise Tax Return).

Which New Mexico return does an S corporation file?

S-Corp (New Mexico Sub-Chapter S Corporate Income and Franchise Tax Return).

S-corp election · NM

New Mexico 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.

New Mexico follows the federal S election. Filing IRS Form 2553 is enough — there is no separate New Mexico election form. New Mexico 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 New Mexico recognize the federal S election?

State treatment of the S election

Follows the federal election	Yes
Separate state election form	None required
State return	S-Corp (New Mexico Sub-Chapter S Corporate Income and Franchise 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 S-Corp. 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 New Mexico

New Mexico follows the federal S election (no separate state election). It allows an optional annual entity-level pass-through entity (PTE) tax election, made on the S-Corp (or PTE) return. S-corporations also owe the flat $50 corporate franchise tax.

Franchise or gross-receipts tax

Flat $50 per year (or partial year) corporate franchise tax on every domestic and foreign corporation registered, doing business, or exercising its franchise in NM. Reported on Form CIT-1; S-corporations owe it too; due even if the corporation is immune from income tax under P.L. 86-272.

New Mexico corporation vs New Mexico 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	$100	$50
Report cadence	Every two years	Not required
Report fee	$25	No report required
Entity-level tax on the LLC side	—	Corporate Franchise Tax

An LLC is $50 cheaper to file here. That is a one-off charge, so it should not decide the entity type on its own.

Full New Mexico LLC cost breakdown · LLC vs C-corp explained · LLC vs S-corp explained

How New Mexico 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. New Mexico 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 S-Corp (New Mexico Sub-Chapter S Corporate Income and Franchise Tax Return).
: New Mexico follows the federal S election (no separate state election). It allows an optional annual entity-level pass-through entity (PTE) tax election, made on the S-Corp (or PTE) return. S-corporations also owe the flat $50 corporate franchise tax.
: S-Corp (New Mexico Sub-Chapter S Corporate Income and Franchise Tax Return).

Where these numbers come from

This page covers how New Mexico treats the federal S-corporation election and what an S corporation still owes the state. Every figure was checked against New Mexico'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. One figure on this page is an exception, and it is flagged at the top: New Mexico's incorporation fee could not be read off an official primary page, so it is shown from statute, labelled as unconfirmed, and excluded from every national ranking and average.

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. Confidence on New Mexico is low: Corporate income tax rate (4.8%/5.9%), the flat $50 franchise tax, CIT-1, and S-Corp return form are directly confirmed from tax.newmexico.gov pages and FYI-350. New Mexico follows the federal S election (confirmed on the pass-through-entity page). RE-VERIFICATION 2026-07-29: The corporate report is BIENNIAL with a $25 filing fee — confirmed from the official NM SOS site (sos.nm.gov/business-services, which states 'The filing fee for the Biennial Report is $25' with a $200 late penalty). Statute NMSA 1978 s.53-5-2 (biennial corporate reports) supports the biennial frequency and a due date of the 15th day of the 4th month after the taxable year-end, with the initial report within 30 days of incorporation. STILL NOT OFFICIALLY CONFIRMED (hence confidence kept low): the $100 Articles-of-Incorporation formation fee and the exact biennial due date were NOT readable from an official primary page this session — the NM SOS Enterprise portal (enterprise.sos.nm.gov) is a JS-rendered SPA that returns only a shell, nmonesource.com returned 404, and Justia's reproduction of NMSA 53-2-1 (which quotes 'not less than one hundred dollars ($100) or more than one thousand dollars ($1,000)') returned HTTP 403 to both curl and WebFetch, so it corroborates but is a secondary source. The $100 formation fee reflects NMSA 53-2-1 and remains unverified against an official primary page.

Primary sources: