The conformity question
Most states conform automatically to the federal S-election. File a clean 2553, receive CP261, and the state treats your entity as an S corp for state income tax purposes without additional paperwork.
A handful of states do not. They require a separate state-level election form, sometimes accompanied by shareholder consents, sometimes with a separate filing fee. Missing the state form means your entity remains a C-corp for state tax purposes, with all the double taxation that implies.
The eight states that require separate filings
New York (CT-6) and a handful of others still maintain independent S corp recognition processes, and some want the federal CP261 attached. The list keeps shrinking: New Jersey dropped its separate election in December 2022 and Louisiana dropped its exclusion regime for periods beginning in 2026. Check your own state rather than trusting a list, including this one.
Even in conforming states, you typically still owe a corporate franchise tax or an annual minimum tax once the S-election is in place. California's 1.5% franchise tax on net income (minimum $800) is the most famous example.
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