C Corp vs S Corp in Georgia

Automatic federal S election recognition

Georgia follows the federal S election without requiring a separate state election form. A federal S corp doing business in Georgia files Form 600S, allocates net income to Georgia by apportionment, and the income flows through to shareholders for Georgia personal income tax at the flat 4.99 percent rate (2026).

Non-resident shareholders may have Georgia withholding requirements on their share of Georgia-source S corp income, addressed via Form G-7 or composite return Form IT-CR.

Source: Georgia Department of Revenue

The Georgia net worth tax

Georgia imposes a net worth tax on corporations (both C and S) doing business in the state. Since 2018, a corporation with net worth of $100,000 or less owes no net worth tax but must still file the return; above that the tax is graduated, starting at $125 and reaching a maximum of $5,000 for net worth over $22 million.

An LLC taxed as a partnership or disregarded entity is not subject to the net worth tax. An LLC that elects to be taxed as a corporation is: the Georgia Department of Revenue answers “Yes” to whether an LLC that files as a corporation is subject to net worth tax. So the LLC wrapper does not avoid this tax once the LLC is taxed as an S corp.

Source: Georgia DOR Corporate Income and Net Worth Tax; O.C.G.A. Sections 48-13-72 and 48-13-73.

The Georgia rate reduction schedule

Georgia's flat rate was 5.39 percent for tax year 2024 and 5.19 percent for 2025. HB 463 (2026) set it at 4.99 percent for tax years beginning on or after 1 January 2026, with reductions of 0.125 percentage points a year from 2027 until it reaches 3.99 percent. The corporate rate follows the individual rate.

Lower future rates compress the difference between S and C corp tax. For a Georgia C corp distributing all its earnings to a Georgia shareholder, the combined Georgia tax at 2026 rates is about 9.7 percent of pre-tax profit: 4.99 percent at the entity, then 4.99 percent on the dividend paid out of the remaining 95.01 percent. Georgia has no general dividend exclusion for individuals.