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S-corp election in Ohio

In short

No franchise or net-worth tax on S corps. Elective entity-level tax (IT 4738) at 3% for 2026, or mandatory IT 1140 withholding at 3%. Separate Commercial Activity Tax on gross receipts and separate municipal net profits taxes.

Does Ohio recognize the federal S election?

Ohio automatically recognizes your federal S election — there is no separate Ohio S-corp election. Your S corp's income passes through to shareholders. At the entity level Ohio gives you a choice: file Form IT 1140 (withholding on behalf of investors), file Form IT 4708 (composite return for investors), or elect the entity-level tax on Form IT 4738. Ohio also has a separate gross-receipts Commercial Activity Tax and, for most Ohio businesses, municipal net profits tax.

Tax the entity still owes

All figures below are read from the current Ohio Revised Code on codes.ohio.gov, in the versions effective September 30, 2025 (amended by House Bill 96, 136th General Assembly), which govern tax year 2026. ELECTING PASS-THROUGH ENTITY TAX (Form IT 4738) — R.C. 5747.38(B)(2): for a taxable year beginning in 2023 and any year thereafter, the rate equals "the tax rate imposed on taxable business income under division (A)(4)(a) of section 5747.02." R.C. 5747.02(A)(4)(a) sets that business income rate at THREE PER CENT. So the 2026 EPTE rate is 3%. The election is made on a form prescribed by the commissioner on or before the deadline to file the R.C. 5747.42 return, applies only to that year, and is irrevocable once made. IT 1140 WITHHOLDING — R.C. 5747.41: the withholding tax on a qualifying pass-through entity's individual investors is imposed "at a rate equal to the tax rate imposed on taxable business income under division (A)(4)(a) of section 5747.02" — also 3% for 2026. It applies only if the entity's adjusted qualifying amounts exceed $1,000, and it does NOT apply to an entity that makes the R.C. 5747.38(C) electing-PTE election. NONBUSINESS INCOME RATE — R.C. 5747.02(A)(3)(c): "For taxable years beginning in 2026 and thereafter, $332.00 plus 2.75% of the amount in excess of $26,050" — a flat 2.75% top rate, with the former 3.125%/3.5% brackets eliminated. Income at or below $26,050 (as indexed) is untaxed. ESTIMATED PAYMENTS — THIS IS THE CHANGE OHIO ANNOUNCED, AND IT IS NOW CONFIRMED. R.C. 5747.43(B), as amended by HB 96 effective 9/30/2025, keys the installments to the BEGINNING of the taxable year: (1) on or before the 15th day of the FOURTH month after the beginning of the taxable year — 22.5% of estimated tax liability; (2) on or before the 15th day of the SIXTH month after the beginning — 45%; (3) on or before the 15th day of the NINTH month after the beginning — 67.5%; (4) on or before the 15th day of the FIRST month of the FOLLOWING taxable year — 90%. For a calendar-year 2026 entity that is April 15, 2026; June 15, 2026; September 15, 2026; and January 15, 2027. Under the superseded schedule the second and third installments fell on July 15 and October 15, so the 2nd and 3rd installments have moved one month earlier. SMALL-ENTITY EXEMPTION — R.C. 5747.43(E)(1): estimated payments are not required for a taxable year if the entity computes in good faith and in a reasonable manner that the sum of its adjusted qualifying amounts or qualifying taxable income is $10,000 or less, for either the immediately preceding taxable year or the taxable year. SAFE HARBOR — R.C. 5747.43(A)(4): the required installment is 25% of the lesser of 90% of current-year liability or 100% of prior-year liability shown on a full 12-month prior-year return. RETURN DUE DATE: the IT 4738 is due April 15 of the calendar year after the year in which the entity's taxable year ends, with a September extension date.

Registering for payroll

An S corp paying wages must register for Ohio employer withholding with the Ohio Department of Taxation and for unemployment insurance with the Ohio Department of Job and Family Services, and must also register for any applicable MUNICIPAL income tax withholding. Ohio mandates electronic filing of employer withholding through the Ohio Business Gateway. The specific Ohio withholding form numbers (IT 501, IT 941, IT 942, SD 101, SD 141) are stated at MEDIUM confidence — only the Ohio Business Gateway electronic-filing mandate and the IT 941 form were directly verified in prior research.

Annual filings

One of the following at the entity level: Form IT 1140 (pass-through entity withholding, mandatory if adjusted qualifying amounts exceed $1,000 and no EPTE election is made), Form IT 4708 (composite return on behalf of investors), or Form IT 4738 (electing pass-through entity tax). Quarterly estimated payments under R.C. 5747.43 on the revised 2026 schedule (April 15 / June 15 / September 15 / January 15 for calendar-year entities) unless the $10,000 small-entity exemption applies. Ohio IT K-1 to investors. Commercial Activity Tax returns if the entity exceeds the CAT exclusion threshold. Municipal net profits tax returns, which may be filed centrally through the Ohio Business Gateway. Ohio has no Secretary of State annual report for corporations, but a statutory agent must be maintained.

Pass-through entity tax

Yes — Ohio's electing pass-through entity tax on Form IT 4738 is the SALT-cap workaround. The rate for 2026 is 3%, tied by R.C. 5747.38(B)(2) to the R.C. 5747.02(A)(4)(a) business income rate. The election is annual and irrevocable for the year once made, and it must be made by the deadline for filing the R.C. 5747.42 return. Electing relieves the entity of the IT 1140 withholding tax under R.C. 5747.41.

The mistake owners make most often in Ohio

Missing the moved estimated-payment dates. For tax years beginning on or after January 1, 2026 the IT 4738 and IT 1140 second and third installments are due June 15 and September 15 — NOT the July 15 and October 15 dates printed in every pre-2026 Ohio instruction booklet and repeated across the web. An entity that follows the old calendar underpays two installments and accrues penalty under R.C. 5747.43(C). The related trap is forgetting Ohio's municipal income taxes entirely: they are administered by cities, not the state, and are a genuinely separate filing obligation.

Filing your federal Form 2553

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

Frequently asked questions

Does Ohio require a separate S-corporation election?

No. Ohio does not require a separate state election. Ohio automatically recognizes your federal S election — there is no separate Ohio S-corp election. Your S corp's income passes through to shareholders.

What tax does an S corporation pay in Ohio?

Where do I file Form 2553 from Ohio?

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 Ohio?

Compare with other states: Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota.

Sources

File your Form 2553 correctly

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

Start my Form 2553

Researched from official Ohio 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.