Does Vermont recognize the federal S-corporation election?

Yes. Vermont 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 BI-471 (Vermont Business Income Tax Return) with Schedule BI-473 (S-Corporation/Partnership shareholder schedule). Nonresident shareholder withholding is remitted on Form WH-435; a composite return on behalf of nonresident owners may be elected or required.

Which Vermont return does an S corporation file?

BI-471 (Vermont Business Income Tax Return) with Schedule BI-473 (S-Corporation/Partnership shareholder schedule). Nonresident shareholder withholding is remitted on Form WH-435; a composite return on behalf of nonresident owners may be elected or required.

Vermont S-Corporation Election

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

Vermont follows the federal S election. Filing IRS Form 2553 is enough. There is no separate Vermont election form. Vermont is one of 42 states that follow the federal election with no state form of their own.

S corporation facts for Vermont: the state recognizes the federal S election for state tax purposes. Incorporating costs $155 to file. The annual report fee is $60. — Vermont 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 Vermont recognize the federal S election?

State treatment of the S election

Follows the federal election	Yes
Separate state election form	None required
State return	BI-471 (Vermont Business Income Tax Return) with Schedule BI-473 (S-Corporation/Partnership shareholder schedule). Nonresident shareholder withholding is remitted on Form WH-435; a composite return on behalf of nonresident owners may be elected or required.

No separate state election to file: the federal election on IRS Form 2553 carries over. That is the election only, the corporation still files BI-471. 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 Vermont

Vermont recognizes the federal S election (no separate state election form). S corporations file Form BI-471 and owe a minimum entity tax of $250, paid with BI-471 (or the resident-owners-only Form BI-476). Income passes through to shareholders; the entity must make nonresident shareholder estimated withholding payments (Form WH-435) and may file a composite return for nonresident owners (mandatory if more than 50 nonresident owners).

Franchise or gross-receipts tax

Vermont has no separate corporate franchise tax. Instead, all active C corporations owe a minimum corporate income tax that scales with Vermont gross receipts: less than $500K = $100; $500K-$1M = $500; $1M-$5M = $2,000; $5M-$300M = $6,000; over $300M = $100,000. A small farm corporation's minimum is $75. This minimum is the floor on the C-corp (CO-411) liability. Pass-through entities (S corps/partnerships/LLCs filing BI-471) instead owe a flat $250 minimum entity tax.

Vermont corporation vs Vermont 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	$155	$155
Report cadence	Every year	Every year
Report fee	$60	$45
Entity-level tax on the LLC side	N/A	Minimum Business Entity Tax

Both entities cost $155 to file in Vermont, so the filing fee is not a reason to pick one over the other.

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

How Vermont compares

State treatment of the federal S election	States
Follows the federal election, no state form needed	42
No corporate income tax, so no state election exists	5
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	N/A
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. Vermont 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 BI-471 (Vermont Business Income Tax Return) with Schedule BI-473 (S-Corporation/Partnership shareholder schedule). Nonresident shareholder withholding is remitted on Form WH-435; a composite return on behalf of nonresident owners may be elected or required.
: Vermont recognizes the federal S election (no separate state election form). S corporations file Form BI-471 and owe a minimum entity tax of $250, paid with BI-471 (or the resident-owners-only Form BI-476). Income passes through to shareholders; the entity must make nonresident shareholder estimated withholding payments (Form WH-435) and may file a composite return for nonresident owners (mandatory if more than 50 nonresident owners).
: BI-471 (Vermont Business Income Tax Return) with Schedule BI-473 (S-Corporation/Partnership shareholder schedule). Nonresident shareholder withholding is remitted on Form WH-435; a composite return on behalf of nonresident owners may be elected or required.

Where these numbers come from

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

https://tax.vermont.gov/business/corporate-income-tax
https://tax.vermont.gov/business/business-entity-income-tax
https://sos.vermont.gov/business-services/fees-statutes
https://legislature.vermont.gov/statutes/section/11A/016/16.22
Vermont statute: 11A V.S.A. § 2.02 (articles of incorporation)
Vermont statute: 11A V.S.A. § 16.22 (corporation annual report)
Vermont statute: 32 V.S.A. § 5832(2)(A) (minimum corporate income tax)

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.

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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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