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S-corp election in Connecticut

In short

No franchise or net-worth tax on S corps. The 6.99% Pass-Through Entity Tax is ELECTIVE (optional) for tax years beginning on or after 1/1/2024; the base composite return CT-1065/CT-1120SI is still mandatory.

Does Connecticut recognize the federal S election?

Connecticut automatically recognizes your federal S election — there is no separate Connecticut S-corp election form. Your S corp does not pay Connecticut corporation business tax on its income; the income passes through to shareholders' CT-1040/CT-1040NR. However, every pass-through entity doing business in Connecticut must still file an entity-level return, Form CT-1065/CT-1120SI (Connecticut Composite Income Tax Return). Separately, the Connecticut Pass-Through Entity (PE) Tax is now OPTIONAL — it was mandatory through tax year 2023 and became elective for tax years beginning on or after January 1, 2024. You elect it by checking the box on a timely filed CT-1065/CT-1120SI and then filing Form CT-PET.

Tax the entity still owes

CT Pass-Through Entity Tax rate: 6.99%. Confirmed verbatim from the 2025 Form CT-PET instructions (Rev. 12/25), Line 2: "PE Tax due — Multiply Line 1 by 6.99%", and again in the Schedule computation: "Multiply Column G by 6.99% (.0699)". The CT-PET instructions state on page 1: "This form is optional and elected on Form CT-1065/CT-1120SI, Connecticut Composite Income Tax Return. This election cannot be amended or revoked." The DRS PE Tax page states: "The Pass-Through Entity (PE) Tax is optional. Entities that elect to pay the PE Tax must do so annually, and the election is irrevocable." Form CT-PET, CT-PET EXT and CT-PET ES must be filed and paid electronically via myconneCT. DUE DATE: Form CT-PET is due on or before the 15th day of the third month following the close of the taxable year — March 15 for calendar-year filers. ESTIMATED PAYMENTS (confirmed from the 2026 CT-PET ES coupon, Rev. 01/26 — a genuine 2026-dated form): required if the 2026 required annual payment is $1,000 or greater; installments due April 15, 2026, June 15, 2026, September 15, 2026 and January 15, 2027, at the lesser of 25%/50%/75%/100% of prior-year tax or 22.5%/45%/67.5%/90% of current-year tax. LATE PAYMENT: interest 1% per month; penalty 10% of tax not paid by the original due date. Connecticut corporation business tax minimum tax does not apply to an S corp.

Registering for payroll

An S corp paying wages must register for Connecticut income tax withholding with DRS (via myconneCT) and for unemployment insurance with the Connecticut Department of Labor. Connecticut Paid Leave (CT Paid Leave Authority) requires registration and an employee-paid contribution. Direct the user to portal.ct.gov/DRS and the CT DOL for current account-setup steps and rates.

Annual filings

Form CT-1065/CT-1120SI, Connecticut Composite Income Tax Return — REQUIRED of every pass-through entity doing business in Connecticut or with Connecticut-source income, regardless of whether the PE Tax is elected. Due the 15th day of the third month after the close of the taxable year (March 15 for calendar-year filers). Form CT-PET, Connecticut Pass-Through Entity Tax Return — only if the PE Tax election is made; same due date; electronic filing and payment mandatory. Form CT-PET ES — quarterly estimated PE Tax coupons (April 15 / June 15 / September 15 / January 15) if the required annual payment is $1,000 or more. Form CT-PET EXT — extension of time to file. Schedule CT-PE — issued to members so they can claim the PE Tax credit. SEPARATELY, a Connecticut annual report is filed with the Secretary of the State (business.ct.gov), not DRS — see caveats, the due-date rule could not be verified.

Pass-through entity tax

Yes — and it is now purely elective, which is a change many sources still get wrong. Connecticut's PE Tax was MANDATORY for tax years 2018–2023 and became OPTIONAL for tax years beginning on or after January 1, 2024. Rate 6.99%. Members claim a credit via Schedule CT-PE, Pass-Through Entity Tax Credit. The election is annual and irrevocable once made, and is made by checking the box on a timely filed Form CT-1065/CT-1120SI.

The mistake owners make most often in Connecticut

Assuming the PE Tax is still mandatory, or assuming that electing out of the PE Tax means you file nothing. Both are wrong. Since tax year 2024 the 6.99% PE Tax is optional, but Form CT-1065/CT-1120SI is still required from every pass-through entity doing business in Connecticut — including a one-shareholder S corp whose only shareholder is a Connecticut resident. The PE Tax election is made ON that return, and once made for a year it is irrevocable and cannot be amended.

Filing your federal Form 2553

Businesses operating in Connecticut send Form 2553 to the IRS Kansas City service center — fax 855-887-7734. Full address and filing checklist for Connecticut.

Frequently asked questions

Does Connecticut require a separate S-corporation election?

No. Connecticut does not require a separate state election. Connecticut automatically recognizes your federal S election — there is no separate Connecticut S-corp election form. Your S corp does not pay Connecticut corporation business tax on its income; the income passes through to shareholders' CT-1040/CT-1040NR.

What tax does an S corporation pay in Connecticut?

Where do I file Form 2553 from Connecticut?

With the IRS Kansas City service center. Fax 855-887-7734, or mail to Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999.

What is the most common S-corp mistake in Connecticut?

Compare with other states: Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho.

Sources

File your Form 2553 correctly

Scorply completes your federal election and includes a Connecticut guide in your packet, so you know exactly what else you owe here.

Start my Form 2553

Researched from official Connecticut sources and verified July 30, 2026. State tax rules change. This is general information, not tax advice — confirm with the state or a CPA before you rely on it.