S-corp election in New Hampshire
New Hampshire does not follow the federal election. The corporation is taxed at the entity level regardless of what you file with the IRS, which usually reverses the federal benefit entirely.
- Breaks even at
- $66,000
- $25,500 higher than a no-tax state
- Top individual rate
- No income tax
- Wages are untaxed by the state
- Entity-level tax
- 7.50%
- Charged on corporate net income
- Annual filing fee
- $100
- Recurring
What to know about New Hampshire
No wage income tax, but the 7.5% Business Profits Tax applies at the entity level once gross receipts exceed roughly $109,000, and New Hampshire does not follow the federal S election.
What it looks like at four profit levels
Single filer, no other household income, a reasonable salary set by profit level, and $1,860 of annual payroll and filing cost.
| Net profit | Salary used | Sole prop cost | S-corp cost | You save |
|---|---|---|---|---|
| $75,000 | $37,500 | $15,572 | $15,404 | $168 |
| $125,000 | $62,500 | $30,056 | $29,734 | $322 |
| $200,000 | $80,000 | $53,509 | $50,436 | $3,073 |
| $350,000 | $120,000 | $113,273 | $98,581 | $14,691 |
Run your own numbers for New Hampshire
Verdict for tax year 2026
Too close to call
On $150,000 of net profit, the S election leaves you $476 better off per year after payroll, tax preparation and every state-level tax we can find — about 0.3% of profit.
Net annual saving
$476
Breaks even at $66,000 of profit
New Hampshire does not recognise the federal S election
No wage income tax, but the 7.5% Business Profits Tax applies at the entity level once gross receipts exceed roughly $109,000, and New Hampshire does not follow the federal S election.
What your salary choice is worth
Below the §199A threshold this curve only ever rises as salary falls, so the limit is legal rather than mathematical. The best defensible figure here is $45,000, worth $4,046 a year.
Where the election starts to pay
Profit on the horizontal axis, annual saving on the vertical, holding your state, filing status and costs fixed and setting a reasonable salary at each level.
Line by line
| Line item | Sole prop / LLC | S corporation | Difference |
|---|---|---|---|
| Owner W-2 wagesSubject to payroll tax, and the figure the §199A wage limitation is measured against. | $0 | $75,000 | +$75,000 |
| Profit taken as distributionsNot subject to self-employment or payroll tax. | $149,900 | $62,216 | −$87,684 |
| Social Security & Medicare taxSelf-employment tax on the left; both halves of FICA plus FUTA on the right. | $21,180 | $11,517 | −$9,663 |
| §199A deductionA deduction, so more is better. Wages are not qualified business income, but they are what satisfies the wage limitation at higher incomes. | $24,642 | $12,443 | −$12,199 |
| Federal income tax | $16,397 | $18,679 | +$2,283 |
| Entity-level taxCharged to the corporation itself. This is the line most calculators omit entirely. | $0 | $5,045 | +$5,045 |
| Compliance costPayroll service, the incremental cost of an 1120-S over a Schedule C, and recurring state fees. | $100 | $1,960 | +$1,860 |
| Total cost of this structure | $37,677 | $37,201 | −$476 |
| Kept by you | $112,323 | $112,799 | +$476 |
Both columns start from the same $150,000 of profit. See the methodology for every rule and rate used.
What to do instead, for now
At this profit level the payroll and filing overhead outweighs the payroll tax you would avoid, so the sensible move is to stay as you are and revisit. Come back when profit is consistently near $66,000 — and judge it on a three-year view rather than one strong year, because revoking an election locks you out for five years.
The higher-value work right now is making sure the profit figure itself is right. Most solo owners overstate net profit by missing the home office deduction, the business use of a vehicle, retirement contributions, or health insurance premiums.
Monthly bookkeeping with a real person attached. An S corporation needs a clean balance sheet for the 1120-S, and this is the part solo owners most often let slide.
From about $299/month
Formation, payroll, bookkeeping and the 1120-S bundled for solo owners specifically. Costs more than assembling it yourself but removes the coordination problem.
From about $349/month
These links pay us a commission if you sign up. It costs you nothing and it has no effect on any number above — the recommendation is driven entirely by your inputs, and when the arithmetic says do not elect, we say do not elect.
New Hampshire questions
At what profit does an S-corp election pay off in New Hampshire?
Around $66,000 of annual net profit for a single filer carrying roughly $1,860 of payroll and tax preparation cost. New Hampshire's entity-level tax of 7.5% pushes this higher than in states without one.
Does New Hampshire recognise the federal S election?
No. New Hampshire taxes S corporations as though the election had never been filed. The corporation pays entity-level tax and you are taxed again on what reaches you — the double taxation the election is supposed to avoid.
What does New Hampshire charge an S corporation each year?
- Entity-level tax of 7.50% on net income
- Annual report or registration fee of $100