Single-Member LLC with S-Corp: Corporation or Disregarded Entity for Wisconsin Withholding?

Someone on Reddit had formed a single-member LLC, filed Form 2553 for an S-Corp election, and was applying for a Wisconsin tax withholding ID. The Wisconsin Department of Revenue form asked whether the company is a Corporation, Partnership, or Disregarded entity for tax purposes. They wanted to know which option is correct. For a single-member LLC that has elected S-Corp treatment, the correct choice is "Corporation." Once the election is in place, the LLC is treated as a corporation (S-Corp) for federal tax, not as a disregarded entity or partnership, and Wisconsin generally follows federal classification.

Bottom line: For a single-member LLC that has elected S-Corp status with Form 2553, select "Corporation" on the Wisconsin withholding form. The entity is treated as a corporation (S-Corp) for federal and typically state tax purposes, so it is not a disregarded entity or a partnership. Choosing Corporation aligns your Wisconsin registration with your federal S-Corp election and employer withholding. For form wording or rules that differ, consult the Wisconsin Department of Revenue or a Wisconsin tax professional.

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Question from Reddit

Corporation or Disregarded Entity selection

I recently formed a single member LLC and filled out form 2553 for S-corp election. I am based solely out of Wisconsin and trying to apply with the Wisconsin Department of Revenue for a tax withholding ID.

In one of the sections, it wants me to choose if the company should be "Corporation", "Partnership", or "Disregarded entity" for tax purposes. Which is the most accurate designation?

Source: Reddit

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Analysis

The user has a single-member LLC that has elected S-Corp treatment via Form 2553. They are applying for a Wisconsin tax withholding ID and must select Corporation, Partnership, or Disregarded entity. The correct choice depends on how the entity is taxed: with an S-Corp election in place, the LLC is treated as a corporation (specifically an S-Corp) for federal (and typically state) tax purposes, not as a disregarded entity or partnership.

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Answer

For your single-member LLC that has elected S-Corp status with Form 2553, the most accurate designation for tax purposes is "Corporation."

Why

• Once you elect S-Corp treatment, your LLC is treated as a corporation for federal tax purposes, specifically as an S corporation. It no longer is treated as a disregarded entity (the default for a single-member LLC with no election). So for any form that asks how the entity is classified for tax, you should select Corporation so the state (and IRS, if applicable) treats it consistently: corporate return (Form 1120-S), payroll/withholding as an employer, etc.
• Partnership is for entities taxed as partnerships (e.g., multi-member LLCs with no S-Corp or C-Corp election). A single-member LLC is not a partnership.
• Disregarded entity is the default for a single-member LLC that has not elected to be taxed as a corporation. Because you did elect S-Corp (corporation), the LLC is not disregarded for tax, so do not choose Disregarded entity.

Practical effect

• Corporation (S-Corp): You will file Form 1120-S for the entity, run payroll (reasonable salary), and the entity will have withholding obligations as an employer. Wisconsin's form is asking for this classification so it can apply the right rules (e.g., corporate/employer withholding).
• Choosing Corporation aligns your Wisconsin withholding registration with your federal S-Corp election and avoids confusion.

Wisconsin-specific

• Wisconsin generally follows the federal classification of entities for income tax. So an LLC that is an S-Corp for federal purposes is treated as an S-Corp (corporation) for Wisconsin. If the Wisconsin form offers only "Corporation," "Partnership," or "Disregarded entity," Corporation is the correct choice for an S-Corp. For any nuance (e.g., different form wording or withholding rules), the Wisconsin Department of Revenue or a Wisconsin tax professional can confirm.

Margen can help you model S-Corp income, salary, and distributions so you're ready for 1120-S and withholding.

Related: New Company C-Corp, Thought S-Corp (Form 2553) · Entity Classification Election Mistake (LLC vs C-Corp) · Converting from S-Corp Back to LLC · Nurse Practitioner Entity Choice: LLC, S-Corp, or C-Corp

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Applicable Sections

Federal / IRS

• Publication 3402: Tax issues for LLCs; a single-member LLC that elects S-Corp status is treated as a corporation (S-Corp) for federal tax purposes, not as a disregarded entity. (IRS Publication 3402)
• Form 2553: S-Corp election; once accepted, the entity is taxed as an S corporation (a type of corporation).

State / Wisconsin

• Wisconsin Department of Revenue: Withholding and entity classification generally follow federal treatment; an S-Corp is a corporation for this purpose. (Wisconsin DOR – confirm current forms and instructions.)

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Practical Notes

• Corporation: Correct for a single-member LLC that has elected S-Corp; the entity is treated as a corporation (S-Corp) for tax.
• Partnership: Not correct for a single-member LLC.
• Disregarded entity: Not correct once you have an S-Corp election in place; that's the default only when the LLC has no corporation election.
• Margen can help you plan S-Corp salary, distributions, and withholding.
• For Wisconsin form wording or withholding rules that differ from this, check the Wisconsin DOR or a local tax professional.

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Limitations

This answer focuses on federal classification and general Wisconsin treatment. State forms and withholding rules can change; for your specific application and any unique Wisconsin rules, consult the Wisconsin Department of Revenue or a Wisconsin tax advisor. Margen can help you model your S-Corp tax and withholding.