Form an S Corporation in Iowa

An S corporation is a tax election, not a separate state entity. You first incorporate by filing Articles of Incorporation with the Iowa Secretary of State ($50), then file IRS Form 2553 to elect S-corp status. Online Fast Track Filing typically processes in 1-2 business days.

The Iowa state filing fee to incorporate is $50, one of the most affordable in the nation. Electing S-corp status with IRS Form 2553 is free. The ongoing biennial report is $30 online.

File IRS Form 2553 within 75 days of forming your corporation, generally by March 15, for the S-corp election to apply to the current tax year. Missing the window usually pushes the election to the following year unless you qualify for late-election relief.

S-corp profits pass through to owners, avoiding the entity-level double taxation C corporations face. Owners pay themselves a reasonable W-2 salary subject to payroll tax, while remaining distributions are not subject to self-employment tax, which can lower the overall tax bill.

An S corporation may have no more than 100 shareholders, all of whom must be US citizens or residents, and it can issue only one class of stock. Foreign (non-resident) owners are not eligible; those owners should consider a standard corporation or LLC instead.

Iowa requires a biennial (every two years) report due April 1st in odd-numbered years, with a $30 online fee. This is lighter than states that mandate annual reports.

Iowa does not impose a franchise tax on the corporation itself. The state has a 7.1% corporate income tax, and S-corp income generally passes through to owners' Iowa personal returns, so state income tax still applies.

No. Under FinCEN's March 2025 interim final rule, US domestic entities and US persons are exempt from Beneficial Ownership Information reporting. Only foreign-formed entities registered to do business in a US state still file.