State-law organization and federal tax treatment are two separate layers.
LLC identifies a form organized under state law. Federal income tax classification may instead be disregarded entity, partnership or corporation. Owner count, eligibility, elections and special rules determine the applicable classification.
A domestic eligible LLC with one owner generally defaults to disregarded status; one with two or more generally defaults to partnership status. An eligible election can change the result. Employment taxes and state rules can require additional analysis even when the entity is disregarded for federal income tax.
Work through an example
Illustration: adding a second member can change a domestic LLC’s default federal classification from disregarded entity to partnership. The state-law name may stay the same while federal reporting changes.
Return to the sources
Business structures
Compare the broad federal tax categories before studying a specific entity or election.
Entity classification and elections
The check-the-box regulation addresses default classification and elective changes for eligible entities.
California LLC tax and fee framework
Study the annual tax and the separate income-based LLC fee, along with exceptions and filing duties.
First edition: November 15, 2026. Educational scope and current links reviewed for this release. Source text and effective dates control.