LLC vs. S-Corp in Connecticut

S-corp is a tax election for your CT LLC — not a separate entity. It saves self-employment tax on distributions. Combined with CT's PET, the savings can be substantial. For formation, see our LLC guide. For comparisons, see overview.

The CT Triple Play: LLC + S-Corp + PET

For Connecticut LLC members earning $150K+:

1. S-corp election: Saves SE tax on distributions (~$7,000-$15,000/year)
2. PET election: Makes CT income tax fully deductible federally (~$3,000-$10,000/year)
3. Combined: $10,000-$25,000+ annual tax savings

This combination makes Connecticut one of the most tax-efficient states for high-earning LLC members.

When to Elect S-Corp in CT

• Income consistently above $60K-$80K
• SE tax savings exceed payroll/admin costs ($2,000-$3,000/year)
• Must run CT payroll (withholding, unemployment)

FAQ

Does S-corp affect my CT income tax rate?

No. CT rates (3%-6.99%) apply the same. S-corp only saves federal self-employment tax. But adding PET on top makes the CT tax effectively fully deductible.