Form 2553: Election by a Small Business Corporation

Form 2553 is the form a corporation, or an entity eligible to elect corporate treatment, uses to make an election under section 1362(a) to be an S corporation. An S corporation's income is generally taxed to its shareholders rather than to the corporation, although the Form 2553 instructions note it may still owe tax on certain income. The form is not a tax return. It changes which return the company files and who pays tax on the profit.

An LLC that meets the S tests doesn't need a separate entity election. The instructions say an eligible entity that meets certain tests is treated as a corporation as of the effective date of the S election and doesn't need to file Form 8832. The regulation behind this, 26 CFR 301.7701-3(c)(1)(v)(C), treats a timely S election by an eligible entity as a deemed election to be classified as an association taxable as a corporation.

Form 8832 is the form most often confused with it. It picks a tax classification (corporation, partnership or disregarded entity) and says nothing about S status.

A company can elect only if it meets every test in the Form 2553 instructions:

• It is a domestic corporation, or a domestic entity eligible to elect corporate treatment, and files Form 2553 on time.
• It has no more than 100 shareholders. A spouse counts as one with the other, and family members as defined in section 1361(c)(1)(B) can be counted as one.
• Its only shareholders are individuals, estates, certain trusts and exempt organizations described in section 401(a) or 501(c)(3).
• It has no nonresident alien shareholders, apart from potential current beneficiaries of an electing small business trust.
• It has one class of stock: all outstanding shares carry identical rights to distribution and liquidation proceeds, though voting rights may differ.
• It isn't a bank using the reserve method for bad debts, an insurance company taxed under subchapter L, or a DISC or former DISC.
• It has, or will adopt, a permitted tax year, such as one ending December 31.
• Every shareholder consents.

For founders, a few of these settle most cases. A nonresident alien founder rules the corporation out. A corporation, partnership or multi-member LLC can't be a shareholder, because the permitted list is individuals, estates, certain trusts and exempt organizations; a disregarded single-member LLC can hold shares if its owner is eligible. And a priced round that issues preferred stock with different distribution or liquidation rights raises the one-class question, so put it to your credentialed preparer before the round closes.

File no more than 2 months and 15 days after the first day of the tax year the election is to take effect, or at any time during the tax year before it. The IRS counts the 2 months to the close of the day before the matching day two months later, then adds 15 days. For a calendar-year corporation switching from C status, the cutoff is March 15 of the year S status begins.

As of 2026-10-19, a calendar-year C corporation that wants S status from January 1, 2027 has until Monday, March 15, 2027. The window for a January 1, 2026 start closed in March 2026.

For a first tax year, the effective date to enter on line E is the earliest of three dates: when the corporation first had shareholders, first had assets, or began doing business. A late election generally takes effect for the following tax year, unless relief applies.

An officer signs and dates the form: the president, vice president, treasurer, assistant treasurer, chief accounting officer, or another corporate officer, such as a tax officer, authorized to sign. The instructions are direct: a Form 2553 that isn't signed won't be considered timely filed.

Each shareholder consents by signing and dating column K, or a separate consent statement with the same information. The printed statement says the consent is binding and can't be withdrawn once the corporation has made a valid election. Who must sign depends on timing. If the election is filed before the effective date, only shareholders who own stock on the day it is made need to consent. If it is filed on or after the effective date, everyone who held stock at any time from the effective date to the filing day must consent, including former shareholders, who are listed with zero shares.

Some holders consent in particular ways. Spouses with a community interest in the stock both sign, and so does each joint tenant and tenant in common. A minor's consent comes from the minor, a legal representative or a parent if none is appointed. An estate acts through its executor or administrator. For an electing small business trust the trustee consents, and for a qualified subchapter S trust the deemed owner does. When a disregarded single-member LLC holds the shares, the form lists the LLC's owner.

A missing consent doesn't always end the election. The instructions point to Regulations section 1.1362-6(b)(3)(iii) when a timely election lacks a shareholder's timely consent.

Send the original (no photocopies) or fax it to the service center for the corporation's principal business location. If you fax it, keep the original with the permanent records. The IRS where-to-file page was last updated on 28 June 2026, and the instructions warn the details can change.

Certain private delivery services count for timely filing; the IRS lists them at IRS.gov/PDS. If the IRS ever questions whether the form was filed, acceptable proof is a certified or registered mail receipt postmarked on time, a Form 2553 with an accepted stamp, one with an IRS received stamp, or an IRS letter saying the election was accepted.

The service center should generally decide within 60 days. If there is no notice within 2 months of the day you faxed or mailed it (5 months if you asked for a fiscal-year ruling in box Q1), the instructions say to call 800-829-4933. Do not file Form 1120-S for any year before the election takes effect, and keep filing Form 1120 until then.

Rev. Proc. 2013-30 gives a simplified route to relief for a late S election, with no user fee. The corporation has to show that:

• it intended to be an S corporation as of the date on line E;
• it fails to qualify only because Form 2553 wasn't filed on time;
• it has reasonable cause and acted diligently to fix the mistake once it found out, explained on line I or an attached statement;
• Form 2553 is filed within 3 years and 75 days of the line E date; and
• every shareholder from that date until filing states that they reported income consistently with the election for the year it should have been made and every year after. Completing column K meets this.

Write "FILED PURSUANT TO REV. PROC. 2013-30" in the top margin of page one. If the form is attached to a Form 1120-S, the Form 1120-S carries "INCLUDES LATE ELECTION(S) FILED PURSUANT TO REV. PROC. 2013-30" at the top. By simple counting, a January 1, 2026 effective date gives until about March 17, 2029; the preparer should confirm the exact day.

Two variations exist. A corporation that, with all its shareholders, reported as an S corporation every year can still ask after the window if at least 6 months have passed since it filed the first year's return and the IRS raised no problem in that time. An LLC that also missed its Form 8832 can request both at once, adding the Part IV representations. Outside these conditions the route is a private letter ruling, which carries a user fee.

They answer three different questions in order.

For an LLC that wants S status, Form 2553 usually does both jobs, because a timely valid S election is a deemed election to be a corporation. File Form 8832 first only when the entity wants corporate treatment without S status, which is also the route for a foreign-owned LLC, since a nonresident alien owner rules out S status.

Once made, the election stays in effect until it is terminated or revoked. After a termination or revocation, IRS consent is generally required for a new Form 2553 for any tax year before the 5th tax year after the first year the termination took effect. The cost trade-offs, including reasonable salary, are in our guide to LLC vs S corporation taxes.

Finbryn's role on an S election is preparation support. We draft the Form 2553 package from your formation documents and cap table: the corporation's name, EIN and state, the effective date and tax year, the shareholder list with share counts and dates acquired for columns J through N, and a checklist of the eligibility tests above. We put the cutoff date on your calendar, March 15 for a January 1 start.

A credentialed preparer you engage reviews the draft. The officer signs, every shareholder signs the consent, and the corporation sends it to the IRS. Finbryn does not sign or send the form. Once the IRS accepts the election, the next return is Form 1120-S. We prepare the workpapers for it under S corporation tax preparation, and the credentialed preparer signs and files it. Founders forming the entity first can start with US LLC formation support.

These repeat from one new S election to the next.

• Letting March 15 pass. The window is short, and a late election normally starts a year later.
• A missing shareholder signature. A signed consent is required from each shareholder, including former ones when the election is filed after the effective date.
• Electing with an ineligible owner. A nonresident alien shareholder, or a corporation or partnership holding shares, breaks the tests.
• Sending a photocopy. The instructions ask for the original when mailing.
• Filing Form 1120-S too early. It follows acceptance, not the day Form 2553 is mailed.
• Not following up. If nothing arrives in 2 months, call the number in the instructions.