A Connecticut LLC is a pass-through by default: single-member LLCs are disregarded entities taxed on Schedule C, and multi-member LLCs are partnerships filing Form 1065. Owners pay Connecticut personal income tax up to 6.99% on Connecticut-sourced income. An S-corporation election reduces self-employment tax once net income passes $40,000-$60,000. Non-resident owners of a foreign-owned single-member LLC file Form 5472 with a pro-forma Form 1120 each year.
A Connecticut LLC is a pass-through entity by default, so the LLC pays no federal entity-level tax and profits flow to the owners, who pay Connecticut personal income tax up to 6.99%. Single-member LLCs are disregarded entities; multi-member LLCs are partnerships. The owner reports LLC income on a personal return and pays tax at the individual rate. An LLC can change this by electing S-corporation or C-corporation treatment when that lowers total tax. Connecticut taxes Connecticut-sourced income through the members' personal returns, and there is no separate flat franchise tax on the LLC in the way Delaware charges one. The recurring state obligation is the $80 annual report, which keeps the LLC in good standing but is a compliance filing rather than an income tax.
By default a single-member Connecticut LLC is a disregarded entity taxed on Schedule C of the owner's personal 1040, and a multi-member LLC is a partnership that files Form 1065 and issues K-1s. Neither pays federal entity-level tax. The disregarded-entity treatment means the IRS looks through the single-member LLC to the owner for income tax. A partnership passes each member's share of profit through on a K-1, and the members pay tax on their personal returns. This default treatment applies until the LLC files Form 2553 or Form 8832 to elect corporate taxation.
Yes. Connecticut charges personal income tax up to 6.99% on income that flows through the LLC to its owners. The tax applies to Connecticut-sourced income at the individual rate. Because the LLC is a pass-through, the state tax is paid on the members' personal returns, not by the LLC as an entity. Connecticut does not levy a Delaware-style flat franchise tax on LLCs; the recurring state charge is the $80 annual report. A member's total state tax depends on their Connecticut-sourced income and personal bracket up to the 6.99% ceiling. Connecticut residents pay state tax on their full share of LLC profit, while non-residents pay Connecticut tax on the portion of income sourced to Connecticut activity.
An S-corporation election is worthwhile once net business income passes $40,000-$60,000 a year. It is made by filing IRS Form 2553 and shields the non-salary portion of income from the 15.3% self-employment tax. An S-corp pays the owner a reasonable salary subject to payroll tax, then distributes the remaining profit free of self-employment tax. Below the $40,000-$60,000 range, the payroll compliance cost outweighs the tax saving. Above it, the saved 15.3% on the distribution portion exceeds the added cost. Anonymousllc.co partners with US tax preparers who run the break-even for each owner. The election is filed on Form 2553, and the IRS accepts it for the current tax year when it is submitted within the filing window, so timing the election matters for the first year of savings.
A default Connecticut LLC owner pays 15.3% self-employment tax on net business income: 12.4% Social Security up to the annual wage base of $168,600 plus 2.9% Medicare with no cap. This is on top of income tax. The self-employment tax funds Social Security and Medicare for owners who take profit as pass-through income rather than a W-2 salary. An S-corporation election reduces it on the distribution portion, but it adds payroll filings and a reasonable-salary requirement. For owners below the S-corp break-even, the full 15.3% on net income is the simpler path.
A non-US resident who owns a Connecticut LLC files Form 5472 with a pro-forma Form 1120 each year when the LLC is a foreign-owned disregarded entity. A multi-member LLC files Form 1065 and issues K-1s instead. Whether the non-resident owes US income tax depends on Effectively Connected Income (ECI). An LLC with no US ECI files the Form 5472 information return but owes no US income tax on foreign-earned profit. With US ECI, the income is subject to US income tax. An ITIN, at $299, supports personal US tax filing when it is needed.
Form 5472 is an IRS information return required for any US disregarded entity with 25% or more foreign ownership. A foreign-owned single-member Connecticut LLC files it annually alongside a pro-forma Form 1120. The form reports transactions between the LLC and its foreign owner. It is an information filing, not an income tax return, but the penalty for missing it is steep, so foreign-owned single-member LLCs treat it as mandatory. Anonymousllc.co partners with US tax preparers familiar with non-resident Form 5472 and pro-forma 1120 filings to keep foreign-owned Connecticut LLCs compliant. The filing is due each year on the same schedule as the pro-forma 1120, so foreign-owned single-member LLCs calendar it alongside their federal deadline.
Under the March 21, 2025 FinCEN interim final rule, domestic reporting companies are exempt from beneficial ownership information reporting, and a Connecticut LLC formed in the US is a domestic reporting company. Foreign reporting companies formed outside the US remain obligated to file. Most Connecticut LLCs are domestic and are exempt under the current rule. If an ownership structure creates a filing duty, Anonymousllc.co prepares the BOI report at $150 per report. Anonymousllc.co tracks FinCEN updates so clients know when the exemption changes.
Forming in Wyoming or New Mexico changes where ownership is disclosed, not the federal tax on income earned in Connecticut. A foreign-qualified LLC pays Connecticut tax on Connecticut-sourced income the same as a native Connecticut LLC. Wyoming charges no state income tax and New Mexico requires no annual report, so the home-state maintenance is lighter, but Connecticut-sourced income remains taxable in Connecticut when the LLC operates there. The anonymous-state route delivers ownership privacy and a lighter home-state filing load, not a way to avoid Connecticut income tax on local activity. Income earned outside Connecticut follows the owner's own tax residency and the LLC's federal treatment, so the sourcing of each dollar of revenue drives where it is taxed.
Form a Wyoming, New Mexico, Delaware, or Nevada anonymous LLC to keep owners off the public record, then foreign-qualify into Connecticut. Anonymousllc.co forms the Anonymous LLC for $397 all-in through the Wyoming flagship. The $397 covers the state filing, registered agent, operating agreement, EIN, and bank applications. When the business operates in Connecticut, it registers as a foreign LLC with the Connecticut Secretary of State and pays Connecticut tax on Connecticut-sourced income. This pairs ownership privacy with Connecticut market access. See /wyoming-anonymous-llc/ and /anonymous-llc/.
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