Tool

S-Corp savings calculator

An S-Corp election changes exactly one thing: how much of your profit carries self-employment tax. This works out that difference on 2026 rates, subtracts what the election costs to run, and tells you the profit level where it starts paying for itself — including when it never does.

Before anything else

Can you hold S-Corp stock?

A non-resident alien cannot be an S corporation shareholder. This is not a preference or a filing you can get around — it is in the statute, and one ineligible shareholder makes the election unavailable.

Are you, and every other owner, a US citizen or a resident alien for tax purposes?

A resident alien holds a green card or meets the substantial presence test. Living abroad on a US passport still counts as a US person.

The rest of the eligibility rules

No non-resident alien shareholders. Every shareholder must be a US citizen or a resident alien — someone who holds a green card or meets the substantial presence test. A single non-resident alien shareholder makes the election unavailable, and if one acquires shares later the election terminates.
No more than 100 shareholders. Members of a family, up to six generations from a common ancestor, may elect to count as one shareholder.
Only one class of stock. All shares must carry identical rights to distributions and liquidation proceeds. Differences in voting rights alone are permitted. For an LLC this means the operating agreement cannot allocate profit disproportionately to capital.
Individuals, estates and certain trusts only. No corporation or partnership can be a shareholder. This is what rules out the common holding-company structure where one LLC owns another.
A domestic entity. The company must be organised in a US state or under federal law. A foreign company cannot make the election, however it is taxed.