Assuming the $456 minimum excise is the whole bill, or that it is additive to the other measures. It is a floor: you pay the greater of the computed excise or $456. Owners also forget it is due even in a loss year, and that the S corporation itself becomes subject to the income measure once Massachusetts gross receipts reach $6 million.
Recognized automaticallyPTET available
S-corp election in Massachusetts
In short
Massachusetts corporate excise: the GREATER OF (a) the non-income measure of $2.60 per $1,000 of Massachusetts tangible property or net worth plus the net-income measure, or (b) the $456 minimum excise — owed every year, including loss years.
Does Massachusetts recognize the federal S election?
Massachusetts automatically recognizes the federal S election — there is no separate Massachusetts S election form. But recognition does NOT mean the entity escapes state-level tax. A Massachusetts S corporation remains subject to the corporate excise and must annually file Form 355S (or Form 63 FI for S-corp financial institutions). The excise has two measures — a net-worth/property measure that always applies, and an income measure that kicks in only above a receipts threshold — plus a floor minimum excise.
Tax the entity still owes
Under M.G.L. c.63 s.39 the corporate excise is the greater of the combined non-income measure ($2.60 per $1,000 of taxable Massachusetts tangible property or net worth) plus the net-income measure, or the $456 minimum excise. The $456 is a floor, not an extra charge added on top. An S corporation with Massachusetts gross receipts of $6 million or more also pays an income measure on its net income (2.00% between $6m and $9m, 3.00% at $9m and above); below $6 million of receipts the income measure does not apply to the S corporation itself and income passes through to the shareholders.
Registering for payroll
Register with the Massachusetts Department of Revenue for a withholding account through MassTaxConnect, and separately with the Massachusetts Department of Unemployment Assistance (DUA) for unemployment insurance through UI Online. Massachusetts Paid Family and Medical Leave (PFML) contributions are also required and are remitted through MassTaxConnect; employer-share obligations depend on headcount (employers with fewer than 25 covered individuals do not owe the employer share). Confirm the current employer-share thresholds with the Department of Family and Medical Leave before your first payroll run.
Annual filings
Form 355S, Massachusetts S Corporation Excise Return — due the 15th day of the 3rd month after the close of the taxable year (March 15 for calendar-year filers), automatic 6-month extension if payment requirements are met. Form 63D-ELT — same due date as Form 355S, only if the PTE excise election is made; must be filed and paid electronically. Estimated corporate excise payments. Annual report with the Secretary of the Commonwealth, Corporations Division — due within two and one-half months after the close of the corporation's fiscal year, $125 by paper or fax, $100 filed electronically, and $150 if filed late; the report must ARRIVE within the window, not merely be postmarked.
Pass-through entity tax
Massachusetts has an elective pass-through entity excise under M.G.L. Chapter 63D, enacted September 30, 2021 in direct response to the federal SALT cap. An eligible PTE may elect annually to pay an excise at 5% on its qualified income taxable in Massachusetts, for tax years beginning on or after January 1, 2021. Mechanics matter: the entity must FIRST make the election on its Form 355S (Form 3 for partnerships, Form 2 for trusts), and then file Form 63D-ELT and pay electronically. Form 63D-ELT is due at the same time as the underlying Form 355S. The member-level credit is deliberately haircut — qualified members receive a credit equal to their proportionate share of the tax paid MULTIPLIED BY 0.9, i.e. a 90% credit, so 10% of the entity-level tax is a permanent cost. Note also that the 5% PTE excise does not capture the Massachusetts 4% surtax on high individual income, which continues to apply at the shareholder level. IMPORTANT CONTINGENCY: M.G.L. c.63D s.3 states the chapter does not apply to any taxable year for which the federal limitation on the state and local tax deduction under IRC s.164(b)(6) is not in effect. If the federal SALT cap lapses or is repealed, the Massachusetts elective pass-through entity excise switches off for that year by operation of its own terms.
The mistake owners make most often in Massachusetts
Filing your federal Form 2553
Businesses operating in Massachusetts send Form 2553 to the IRS Kansas City service center — fax 855-887-7734. Full address and filing checklist for Massachusetts.
Frequently asked questions
Does Massachusetts require a separate S-corporation election?
No. Massachusetts does not require a separate state election. Massachusetts automatically recognizes the federal S election — there is no separate Massachusetts S election form. But recognition does NOT mean the entity escapes state-level tax.
What tax does an S corporation pay in Massachusetts?
Massachusetts corporate excise: the GREATER OF (a) the non-income measure of $2.60 per $1,000 of Massachusetts tangible property or net worth plus the net-income measure, or (b) the $456 minimum excise — owed every year, including loss years.
Where do I file Form 2553 from Massachusetts?
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 Massachusetts?
Assuming the $456 minimum excise is the whole bill, or that it is additive to the other measures. It is a floor: you pay the greater of the computed excise or $456. Owners also forget it is due even in a loss year, and that the S corporation itself becomes subject to the income measure once Massachusetts gross receipts reach $6 million.
Compare with other states: Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska.
Sources
- https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter63/Section39
- https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter63/Section32D
- https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter63D
- https://www.mass.gov/info-details/s-corporations
- https://www.mass.gov/info-details/elective-pass-through-entity-excise
- https://www.mass.gov/doc/2025-form-355s-instructions/download
File your Form 2553 correctly
Scorply completes your federal election and includes a Massachusetts guide in your packet, so you know exactly what else you owe here.
Start my Form 2553Some details here are less firmly sourced
Massachusetts 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 Massachusetts 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.