Fill Out IRS Form 2553 Online

What is Form 2553 used for

Filing Form 2553 changes how the entity is taxed, not how it is organized under state law. Once the IRS accepts the election, the company files Form 1120-S each year and issues Schedule K-1 to shareholders, who report their shares on personal returns.

To qualify, the entity must be a domestic corporation or an LLC electing corporate treatment, have no more than 100 shareholders, have only allowable shareholders (individuals, certain trusts, and estates, but not partnerships, corporations, or nonresident aliens), and have only one class of stock.

Who files Form 2553

The election is made by the entity, but it requires unanimous shareholder participation:

• A corporate officer signs the election on behalf of the corporation.
• Every shareholder holding stock on the date of the election must sign a consent, either in Part I or on attached consent statements.
• LLCs that want S treatment can generally file Form 2553 alone, which is treated as also electing corporate classification.

How to fill out Form 2553

Part I collects the entity's name, EIN, incorporation date and state, the effective date of the election, the tax year, and each shareholder's name, consent signature, stock ownership, and taxpayer identification number.

Part II applies only if you are requesting a fiscal tax year rather than a calendar year. Part III is for a Qualified Subchapter S Trust (QSST) election, and Part IV contains the representations used with certain late corporate classification elections. Most small businesses complete only Part I.

Deadlines and late election relief

The general deadline: file no more than 2 months and 15 days after the beginning of the tax year the election is to take effect, or at any time during the tax year before the year it takes effect. For a new calendar-year corporation, that typically means filing by March 15 of the first year you want S status.

Missing the window is common and often fixable. The IRS grants late election relief when the entity intended to elect S status, has reasonable cause for the delay, and meets the conditions in the current revenue procedure, which are summarized in the Form 2553 instructions. Given the stakes, many businesses have a tax professional review the election before filing.