Blowing the PTE election deadline. Minnesota will NOT accept a late-filed PTE election — there is no relief provision, no amended-return fix, and no reasonable-cause exception — and the deadline is the entity's extended due date (September 15 for calendar-year filers), which owners routinely assume is just the filing deadline rather than a hard election cutoff. The other frequent and disproportionately costly mistake is ignoring the Secretary of State's Annual Business Renewal: precisely because it is FREE, owners never think of it as a bill, miss it, and the state administratively dissolves the corporation — which can jeopardize liability protection and require reinstatement.
Recognized automaticallyPTET available
S-corp election in Minnesota
In short
Minnesota minimum fee based on Minnesota property plus payroll plus sales; $0 below the threshold, which is $1,280,000 for 2026.
Does Minnesota recognize the federal S election?
Minnesota automatically follows the federal S election; there is no separate Minnesota election. S corporations file Form M8, S Corporation Return, with Schedule KS to shareholders. Income passes through to shareholders, but the entity remains subject to the Minnesota minimum fee, to tax on federally taxed built-in gains and passive income, and to nonresident withholding or composite filing obligations.
Tax the entity still owes
The minimum fee applies to S corporations and is based on combined Minnesota property, payroll, and sales/receipts, with amounts adjusted annually for inflation. 2026 brackets: under $1,280,000 = $0; $1,280,000–$2,559,999 = $260; $2,560,000–$12,829,999 = $770; $12,830,000–$25,639,999 = $2,560; $25,640,000–$51,279,999 = $5,140; $51,280,000 and over = $12,830. For comparison, 2025: under $1,250,000 = $0; then $260 / $750 / $2,510 / $5,020 / $12,540. Most small S corporations therefore owe $0. Exemptions include single-member LLCs filing only on the individual return, partnerships with over 80% farming income, certain C corporation RICs/REITs/REMICs, businesses protected by P.L. 86-272 without a Minnesota filing requirement, and qualified JOBZ businesses with all property and payroll in the zone.
Registering for payroll
Register with the Minnesota Department of Revenue through e-Services for a withholding tax account; the employee completes Form W-4MN. Register with the Minnesota Department of Employment and Economic Development (DEED) for unemployment insurance at uimn.org, with quarterly wage detail reports. Minnesota's Paid Leave program adds new employer and employee premiums administered by DEED — a material new payroll cost for anyone newly putting themselves on W-2 wages. Form W.
Annual filings
Form M8 with Schedule KS to each shareholder; the due date follows the federal S corporation return due date with an automatic extension to file. The minimum fee is computed and reported on Form M8. Schedule PTE if making the PTE election, due by the entity's extended due date. Quarterly withholding deposits and quarterly DEED unemployment wage detail reports. Annual Business Renewal with the Minnesota Secretary of State, due December 31 each year and free for entities in good standing — but failure to file results in administrative dissolution.
Pass-through entity tax
Yes. The rate is 9.85%, matching Minnesota's highest individual income tax rate. The tax is available for taxable years beginning after December 31, 2020 and BEFORE JANUARY 1, 2028 — it was re-enacted/extended via HF3127/SF3405. Significant 2026 change: for tax years 2023 through 2025 one or more owners had to be subject to the federal SALT deduction limit, but for 2026 and after that requirement was REMOVED — DOR now states 'It is not required that one or more owners be subject to the federal SALT deduction limit.' The election is made on Schedule PTE by the entity's extended due date, which DOR gives as September 15, 2026 for calendar-year filers, and DOR states flatly: 'We will not accept late-filed PTE elections.' For 2026 only, electing businesses must make four equal, on-time estimated payments, with first-quarter payments treated as timely if paid by the second-quarter due date.
The mistake owners make most often in Minnesota
Filing your federal Form 2553
Businesses operating in Minnesota send Form 2553 to the IRS Ogden service center — fax 855-214-7520. Full address and filing checklist for Minnesota.
Frequently asked questions
Does Minnesota require a separate S-corporation election?
No. Minnesota does not require a separate state election. Minnesota automatically follows the federal S election; there is no separate Minnesota election. S corporations file Form M8, S Corporation Return, with Schedule KS to shareholders.
What tax does an S corporation pay in Minnesota?
Minnesota minimum fee based on Minnesota property plus payroll plus sales; $0 below the threshold, which is $1,280,000 for 2026.
Where do I file Form 2553 from Minnesota?
With the IRS Ogden service center. Fax 855-214-7520, or mail to Department of the Treasury, Internal Revenue Service, Ogden, UT 84201.
What is the most common S-corp mistake in Minnesota?
Blowing the PTE election deadline. Minnesota will NOT accept a late-filed PTE election — there is no relief provision, no amended-return fix, and no reasonable-cause exception — and the deadline is the entity's extended due date (September 15 for calendar-year filers), which owners routinely assume is just the filing deadline rather than a hard election cutoff. The other frequent and disproportionately costly mistake is ignoring the Secretary of State's Annual Business Renewal: precisely because it is FREE, owners never think of it as a bill, miss it, and the state administratively dissolves the corporation — which can jeopardize liability protection and require reinstatement.
Compare with other states: Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire.
Sources
File your Form 2553 correctly
Scorply completes your federal election and includes a Minnesota guide in your packet, so you know exactly what else you owe here.
Start my Form 2553Researched from official Minnesota 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.