Two Kentucky-specific traps. First, the return due date: Kentucky's Form 720S is due the 15th day of the FOURTH month (April 15), not the federal March 15 — owners who assume the dates match either file needlessly early or, worse, assume a March 15 federal extension covers Kentucky. Second and more costly, the June 30 Secretary of State annual report: it costs only $15, but missing it causes ADMINISTRATIVE DISSOLUTION of a domestic entity, which puts the company in bad standing until it is reinstated and can jeopardize contracts, financing and liability protection. And the LLET's $175 minimum is owed even in a loss year.
Recognized automaticallyPTET available
S-corp election in Kentucky
In short
Limited Liability Entity Tax (LLET) applies to every Kentucky S corp with a $175 annual minimum, regardless of profit or loss. An optional pass-through entity tax election is also available.
Does Kentucky recognize the federal S election?
Kentucky automatically recognizes your federal S election — there is no separate Kentucky S-corp election. Your S corp files Form 720S, the Kentucky S Corporation Income Tax and LLET Return. Two things surprise owners: Kentucky imposes a Limited Liability Entity Tax (LLET) on the entity itself regardless of profit, and most Kentucky businesses also owe LOCAL occupational license taxes to a city and/or county on top of state tax.
Tax the entity still owes
INDIVIDUAL / PTET RATE: 3.5% for tax years beginning on or after January 1, 2026. It was set by House Bill 1 of the 2025 Regular Session, signed February 6, 2025, which amended KRS 141.020. The rate was 4.0% for 2025. WARNING: the Kentucky Department of Revenue's individual income tax web page STILL reads "The tax rate is four (4) percent" — that DOR page is stale; the statute controls. Because Kentucky's pass-through entity tax rate tracks KRS 141.020, the PTET rate for 2026 is 3.5%. LLET: the Limited Liability Entity Tax is computed on Kentucky gross receipts or gross profits with a $175 annual minimum; it applies to every S corp doing business in Kentucky whether or not it is profitable. RETURN DUE DATE: Form 720S is due the 15th day of the FOURTH month following the close of the taxable year — April 15 for calendar-year filers. NOTE THIS IS UNUSUAL: unlike most states, Kentucky does NOT follow the federal March 15 S-corp date. See caveats — this is corroborated from two Kentucky DOR primary sources (the nonresident withholding page, "by the 15th day of the fourth month following the close of the tax year," and the PTET instructions, which tie the election deadline to "the 15th day of the fourth month after the close of the taxable year" and state the PTET is "due on the same date as the entity's annual return") but was not quoted from the current 720S instructions themselves. SECRETARY OF STATE ANNUAL REPORT — NOW CONFIRMED FROM PRIMARY SOURCE: sos.ky.gov states "all entities conducting business in the Commonwealth of Kentucky are required to file annual reports with this office by June 30 of each year" and "Your annual report must be signed, dated and accompanied by a $15 filing fee." Domestic entities that fail to file by June 30 are ADMINISTRATIVELY DISSOLVED; foreign entities have their certificates of authority revoked.
Registering for payroll
An S corp paying wages must register for Kentucky income tax withholding with the Kentucky Department of Revenue and for unemployment insurance with the Kentucky Office of Unemployment Insurance, typically via the Kentucky One Stop Business Portal (onestop.ky.gov). SEPARATELY AND IMPORTANTLY, most Kentucky cities and counties impose an occupational license tax on wages and/or net profits, administered by a local revenue commission — these require their own registration and returns.
Annual filings
Form 720S, Kentucky S Corporation Income Tax and LLET Return — due the 15th day of the fourth month after the close of the taxable year (April 15 for calendar-year filers); pays the LLET including the $175 minimum. Kentucky Schedule K-1 to each shareholder. Form 740-PTET / PTET election filings if the pass-through entity tax election is made. Estimated LLET/PTET payments where required. KENTUCKY SECRETARY OF STATE ANNUAL REPORT — due June 30 every year, $15 fee, filed online at sos.ky.gov or by mail; must confirm the principal office and registered agent/office and list or confirm officers, directors, members or managers. LOCAL occupational license tax returns to each applicable city and/or county.
Pass-through entity tax
Yes — Kentucky offers an elective pass-through entity tax as a SALT-cap workaround. The rate tracks KRS 141.020, so it is 3.5% for tax years beginning on or after January 1, 2026 (4.0% for 2025, 4.5% for 2023). The election deadline is tied to the 15th day of the fourth month after the close of the taxable year, and the PTET is due on the same date as the entity's annual return. CAUTION: the PTET instructions PDF currently circulating is the 2023 edition, 42A740-PTET(I) (10-23), and its line-by-line instructions show the 2023 rate of 4.5% — the MECHANICS in that document are current but the RATE shown is three years stale.
The mistake owners make most often in Kentucky
Filing your federal Form 2553
Businesses operating in Kentucky send Form 2553 to the IRS Kansas City service center — fax 855-887-7734. Full address and filing checklist for Kentucky.
Frequently asked questions
Does Kentucky require a separate S-corporation election?
No. Kentucky does not require a separate state election. Kentucky automatically recognizes your federal S election — there is no separate Kentucky S-corp election. Your S corp files Form 720S, the Kentucky S Corporation Income Tax and LLET Return.
What tax does an S corporation pay in Kentucky?
Limited Liability Entity Tax (LLET) applies to every Kentucky S corp with a $175 annual minimum, regardless of profit or loss. An optional pass-through entity tax election is also available.
Where do I file Form 2553 from Kentucky?
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 Kentucky?
Two Kentucky-specific traps. First, the return due date: Kentucky's Form 720S is due the 15th day of the FOURTH month (April 15), not the federal March 15 — owners who assume the dates match either file needlessly early or, worse, assume a March 15 federal extension covers Kentucky. Second and more costly, the June 30 Secretary of State annual report: it costs only $15, but missing it causes ADMINISTRATIVE DISSOLUTION of a domestic entity, which puts the company in bad standing until it is reinstated and can jeopardize contracts, financing and liability protection. And the LLET's $175 minimum is owed even in a loss year.
Compare with other states: Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota.
Sources
File your Form 2553 correctly
Scorply completes your federal election and includes a Kentucky guide in your packet, so you know exactly what else you owe here.
Start my Form 2553Some details here are less firmly sourced
Kentucky publishes some of this information in places our checks could not reach directly, so a few of the finer details below — filing fees, exact due dates — are drawn from secondary sources. The recognition rule and the entity-level tax are solid. Confirm the specifics with the state before you rely on a date or a dollar figure.
Researched from official Kentucky 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.