State Guide

    Louisiana S Corp Election

    Louisiana used to be the hard one. It taxed S corporations as C corporations unless you affirmatively claimed an exclusion, and it charged a franchise tax on top. Both of those things changed. For tax periods beginning on or after 1 January 2026, Louisiana recognises your federal S corporation as a pass-through entity automatically, with no state election required, and the corporate franchise tax is repealed.

    The Key Facts

    Separate LA S electionNot required from 2026
    How LA S status arisesAutomatically, from your federal S election
    LA corporate income tax on the S corpNone. Income passes to shareholders
    What the entity filesAn informational return
    Corporate franchise taxRepealed for periods from 1 Jan 2026
    Form R-6980Still exists, but it is the optional PTE tax election

    Verified 6 August 2026 against Louisiana Department of Revenue Revenue Information Bulletin 25-032 and Act 382 of the 2025 Regular Session, amending La. R.S. 47:287.732.

    What R-6980 actually is, and why the confusion

    Almost every article about Louisiana S corporations still tells you to file R-6980 to get S treatment. That is describing a regime that ended. Under the old law an S corporation was taxed like a C corporation in Louisiana unless it claimed the S corporation exclusion, and the income you excluded was then taxed at shareholder level while anything left over stayed in the corporate net. Act 382 deleted that whole two track system.

    R-6980 survives as something else: the pass-through entity tax electionunder R.S. 47:287.732.2. That is the elective entity level tax that exists so owners can work around the federal cap on state and local tax deductions. It is optional, it is a planning decision rather than a compliance step, and it is not what makes you an S corporation in Louisiana. Nothing does that now except your federal election.

    Periods before 2026 are a different question

    The automatic treatment starts with periods beginning on or after 1 January 2026. If you were operating in Louisiana before that and never claimed the exclusion, the old rules govern those earlier years and there may be a cleanup to do. That is worth a conversation rather than a form.

    Should you make the PTE election?

    Now that pass-through treatment is automatic, R-6980 becomes a planning question rather than a compliance one. The pass-through entity tax lets the business pay Louisiana income tax at the entity level, which for some owners converts a capped personal deduction into an uncapped business one. It is binding for the year and it is not right for everyone. Whether it helps depends on your other state and local taxes, your federal bracket and what else is on your return, so it is worth modelling before electing rather than after.

    Filing Checklist

    • File federal Form 2553 with the IRS. That is what now gives you Louisiana treatment too.
    • Keep your CP261 acceptance notice.
    • File the Louisiana informational return for the entity.
    • Issue Louisiana Schedule K-1 to each shareholder.
    • Decide, deliberately, whether the R-6980 pass-through entity tax election helps you.
    • If the business operated in Louisiana before 2026, check how those earlier years were handled.

    Common Mistakes

    • Following advice written before Act 382. Most of what is published still describes the old exclusion regime and tells you to file R-6980 to become an S corporation in Louisiana. From 2026 that is simply not how it works.
    • Confusing the PTE election with an S election. Same form number, completely different purpose. One is optional tax planning, the other no longer exists.
    • Budgeting for a franchise tax that was repealed. Gone for periods beginning on or after 1 January 2026.
    • Assuming the new rule cleans up old years. It is not retroactive. Pre-2026 periods are governed by the law as it stood then.

    Common questions

    Does Louisiana require a separate S Corp election?

    Not for tax periods beginning on or after 1 January 2026. Act 382 of the 2025 Regular Session amended La. R.S. 47:287.732 so that Louisiana recognises S corporations as pass-through entities automatically, with no state election required.

    What is Form R-6980 for then?

    R-6980 is the optional pass-through entity tax election under La. R.S. 47:287.732.2. It lets the business pay Louisiana income tax at the entity level, which some owners use to work around the federal cap on state and local tax deductions. It is a planning choice, not a step in becoming an S corporation.

    Does Louisiana still charge a corporate franchise tax?

    No. The Louisiana corporate franchise tax is repealed for taxable periods beginning on or after 1 January 2026.

    Related

    Operating in LA? We handle the state filing for you.