Louisiana S corp tax return: what changes for tax year 2026

Which form, and which year it applies to

Louisiana uses Form CIT-620 for both years. The instructions say the informational return should be filed only by S corporations with a short period beginning on or after January 1, 2026. All other S corporations complete the form as a corporation.

Act 382 of the 2025 Regular Legislative Session amended La. R.S. 47:287.732 so that S corporations are pass-through entities for periods beginning on or after January 1, 2026. Before that, an S corporation is taxed as a C corporation unless it elected the S corporation exclusion. Revenue Information Bulletin 25-032, dated December 17, 2025, explains it but is informal guidance without the force of law.

The franchise tax was repealed by Act 6 of the 2024 Third Extraordinary Legislative Session for periods beginning on or after January 1, 2026. The Department notes that filing obligations may remain for earlier periods, so check whether a 2025 franchise filing is still open.

The 2025 return: 5.5% and the Line 1B exclusion

The flat corporate rate is 5.5% for periods beginning on or after January 1, 2025. Line 1B reduces Louisiana net income (Line 1A) by the share of stock held by Louisiana residents on the last day of the year. A nonresident individual counts as a resident for this ratio only if that shareholder filed a correct, complete Louisiana return and paid the tax due.

That condition is where 2025 returns go wrong. Take Louisiana net income of $200,000 and 100 shares. If 60 shares belong to Louisiana residents or to nonresidents who filed and paid, the taxable amount is $80,000 and the tax is $4,400 before credits. If the holder of 20 of those shares is a Texas resident who never filed in Louisiana, the tax rises by half.

Ask each nonresident shareholder for the Louisiana return they filed, usually Form IT-540B (the nonresident and part-year resident return), plus proof of payment. Attach a schedule listing every shareholder with SSN or TIN, shares at year end and distributive share of net income.

The 2026 return compared with 2025

For 2026 the corporation still completes Form CIT-620 for allocation and apportionment, and files electronically. The instructions say to complete Lines A through I and M through O, plus all applicable schedules including Schedules K and L.

What drops out against 2025: short-period S corporations skip Lines 1A through 1E, and the S corporation exclusion cannot be claimed. Lines 2A and 2B, attributable income and composite tax, are used only for a composite return. Estimated payments are no longer required, and a qualified subchapter S subsidiary is a disregarded entity whose items go on the parent's CIT-620.

For a short period beginning in 2026, use the 2025 form: mark the short period box, enter the federal return's dates, skip 1A through 1E, complete Schedule K, and add Schedule L only for a composite. The instructions I reviewed cover the 2025 form only, so check the Department's forms page for a 2026 version before building a full-year 2026 engagement.

Composite returns and nonresident shareholders

A composite return is optional. Mark the box labeled S corporation composite filing and complete Schedule K and Schedule L. Schedule L lists each included nonresident with name, SSN or FEIN, address, share of profit, loss and credits, and income attributable to Louisiana. Tax is 3 percent of that income, and the Schedule L total carries to Line 2B.

Example for tax year 2026: the corporation has $300,000 of Louisiana-attributable income and a Mississippi shareholder owns 30 percent. Attributable income is $90,000 and the composite payment is $2,700. Per the bulletin, if that shareholder's only Louisiana income comes from the S corporation and composite tax is paid for them, they need not file a separate return. That is the Department's stated position, not a statute.

Expect an individual Form IT-540B filing for any nonresident left off Schedule L or with other Louisiana income, such as rental property. A composite return is not allowed with a net loss, so every shareholder reports the loss from the federal Schedule K-1 (Form 1120-S). Residents, estates and trusts go on Schedule K, never Schedule L.

Without a composite payment, nonresident shareholders owe estimated tax on Form IT-540ES under La. R.S. 47:116.

Credits and net operating losses at the switch

For periods beginning on or after January 1, 2026, credits flow through to shareholders on Schedule K or L under La. R.S. 47:1675(F), including previously earned credits.

On the 2025 return, the Line 1B ratio also applies to a Louisiana net loss, so only the non-excluded share is carried forward at the corporate level, and the deduction on Lines 1C and 1C1 is limited to 72 percent of net income. The instructions do not say how that carryforward is used once the entity is informational. List each carryforward and ask the Department at Business.Tax@la.gov before advising the client.

The pass-through entity election

An S corporation can elect entity-level tax under La. R.S. 47:287.732.2 on Form R-6980, which is emailed and effective only once Louisiana accepts it. Tax is computed on Schedule H-1 at a flat 3% for periods beginning on or after January 1, 2025. The election covers the year made and all later years until terminated, and the corporation cannot claim the Line 1B exclusion.

The window closes on the 15th day of the fourth month after the first effective year ends. For a calendar-year corporation, that closed in mid-April 2026 for a 2025 election, and runs to mid-April 2027 for 2026. The package needs approval by owners holding more than half of capital account balances, an owner list with tax identification numbers, three prior years of federal returns with K-1s, formation documents, and a list of unused Louisiana net operating losses and credits.

Each owner submits Form R-6981. Under Revenue Information Bulletin 26-007, dated February 10, 2026, a pro forma federal return is required only on request.

Due dates, extensions and penalties

For the 2025 return, a calendar-year Form CIT-620 was due May 15, 2026. The rule for any year is the 15th day of the fifth month after year end, moved to the next business day when it lands on a weekend or holiday. The instructions give no separate date for the informational return, so plan on the same rule for the 2026 return, where May 15, 2027 is a Saturday.

Louisiana grants a six-month extension if the client timely requested a federal extension on Form 7004, and you mark the box on the return. No Louisiana extension form is filed. The 2025 extended due date is November 16, 2026. Payment is not extended: tax owed was due with Form CIT-620EXT-V by May 15, 2026.

Louisiana charges 5 percent of the tax due for each 30 days of late filing plus 5 percent of unpaid tax for each 30 days of late payment, capped together at 25 percent. Federally, Form 1120-S was due March 16, 2026 for 2025, with a late filing penalty of $255 per shareholder per month, up to 12 months.

Documents to collect from the client

Start with the filed federal Form 1120-S and every Schedule K-1 (Form 1120-S). The LDR account number must appear on every page and the FEIN cannot stand in for it, so ask for it. Message to send: "Please send your Louisiana revenue account number from any LDR letter, plus every shareholder's state of residence on the last day of the year, shares owned and SSN or ITIN." Then follow up on the items below.

For each nonresident shareholder, collect other Louisiana income and, for 2025, the Louisiana return and payment proof. Ask whether the client wants a composite return or the election, since they exclude each other. Request gross receipts by delivery location for apportionment. If the company paid contractors for work in Louisiana, federal Form 1099-NEC recipients must also be filed with the Department electronically.

Usual can collect the roster and K-1s in one document request.