Download IRS 2553 Template

The IRS Form 2553 is a crucial document for small businesses that wish to elect S Corporation status for tax purposes. By completing this form, eligible corporations can enjoy potential tax benefits, including avoiding double taxation on corporate income. If you're ready to take the next step in your business journey, fill out the form by clicking the button below.

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Misconceptions

The IRS Form 2553 is essential for small business owners who wish to elect S Corporation status. However, several misconceptions surround this form. Understanding these misconceptions can help ensure proper filing and compliance.

Misconception 1: Only large businesses can file Form 2553.

This is incorrect. Form 2553 is specifically designed for small businesses. Any eligible domestic corporation can file for S Corporation status, regardless of size.

Misconception 2: Form 2553 must be filed every year.

This misconception is misleading. Once a corporation elects S Corporation status by filing Form 2553, it does not need to file the form annually. The election remains in effect as long as the corporation meets the eligibility requirements.

Misconception 3: All shareholders must be U.S. citizens.

While it is true that S Corporations have restrictions on shareholders, not all must be U.S. citizens. Certain resident aliens can also be shareholders, provided they meet specific criteria.

Misconception 4: Filing Form 2553 guarantees tax savings.

This statement is overly simplistic. While S Corporation status can provide tax benefits, the actual savings depend on various factors, including the corporation's income and the distribution of profits.

Misconception 5: The deadline for filing Form 2553 is the same for all businesses.

The deadline for filing varies based on the corporation's tax year. Generally, Form 2553 must be filed within two months and 15 days after the beginning of the tax year the election is to take effect.

Misconception 6: You can file Form 2553 without considering state requirements.

This is a critical oversight. While Form 2553 is a federal form, state laws regarding S Corporation elections may differ. It is essential to check state requirements to ensure compliance.

File Details

Fact Name	Details
Purpose	The IRS Form 2553 is used to elect S Corporation status for federal tax purposes.
Eligibility	To qualify, a corporation must have 100 or fewer shareholders and meet specific requirements.
Filing Deadline	The form must be filed within 75 days of the beginning of the tax year for which the election is to take effect.
Signature Requirement	All shareholders must sign the form to validate the election.
State Considerations	Some states require additional forms or filings to recognize the S Corporation status.
Governing Law (California)	In California, Form 100S is required to elect S Corporation status at the state level.
Governing Law (New York)	New York requires Form CT-6 for S Corporation election recognition.
Tax Benefits	S Corporations can avoid double taxation on corporate income, as income is passed through to shareholders.
Revocation	Once elected, the S Corporation status can be revoked, but this requires specific procedures and may have tax implications.

Key takeaways

Filling out the IRS Form 2553 is an important step for small business owners who want to elect S Corporation status. Here are some key takeaways to consider:

The form must be submitted to the IRS to elect S Corporation status for tax purposes.
Timeliness is crucial; the form should generally be filed within 75 days of the beginning of the tax year.
All shareholders must consent to the S Corporation election, which requires their signatures on the form.
The business must meet specific eligibility criteria, including being a domestic corporation and having no more than 100 shareholders.
Only certain types of entities can elect S Corporation status, such as corporations and limited liability companies (LLCs) that meet the requirements.
Shareholders must be individuals, certain trusts, or estates; corporations and partnerships cannot be shareholders.
The form can be filed electronically or by mail, but ensure that all required information is accurately completed.
Failure to file the form correctly or on time can result in the loss of S Corporation status, which could have tax implications.
Once the election is made, it remains in effect until it is revoked or the business no longer meets the eligibility requirements.
Consulting with a tax professional can provide guidance and help ensure compliance with all regulations.

Dos and Don'ts

When filling out the IRS 2553 form, it’s important to follow some guidelines to ensure your application is processed smoothly. Here are five things you should and shouldn’t do:

Do double-check your eligibility before starting the form.
Do provide accurate information about your business and its owners.
Do file the form on time to avoid delays.
Don't forget to sign and date the form before submission.
Don't leave any required fields blank; incomplete forms can lead to rejection.

Common mistakes

Incorrect Entity Type Selection: Many individuals fail to accurately identify their business entity type. Ensure you select the correct option that reflects your business structure.
Missing Signatures: It's common to overlook the requirement for signatures. All necessary parties must sign the form for it to be valid.
Filing Deadlines Ignored: Some applicants miss the critical deadline for submitting Form 2553. Be aware of the timeline to avoid complications.
Incorrect Tax Year: Selecting the wrong tax year can lead to issues. Make sure to indicate the appropriate tax year for your S Corporation election.
Failure to Provide All Required Information: Incomplete forms are a frequent problem. Double-check that all sections are filled out completely.
Not Including All Shareholders: Every shareholder must be listed on the form. Omitting a shareholder can invalidate the election.
Using Incorrect Tax Identification Number: Ensure that you enter the correct Employer Identification Number (EIN) or Social Security Number (SSN). An error here can cause delays.
Not Following Instructions: Ignoring the detailed instructions provided with the form can lead to mistakes. Read through the guidelines carefully before submitting.
Assuming Automatic Approval: Some people mistakenly believe that submitting Form 2553 guarantees approval. Understand that the IRS may require additional information or clarification.
Failing to Keep Copies: It’s crucial to retain copies of the submitted form and any correspondence. This can be helpful for future reference or in case of inquiries.

What You Should Know About This Form

What is the IRS Form 2553?
The IRS Form 2553, officially known as the "Election by a Small Business Corporation," is a form that allows a corporation to elect to be taxed as an S corporation. By making this election, the corporation can avoid double taxation on its income, as the profits and losses can pass directly to shareholders.
Who is eligible to file Form 2553?
To be eligible, a corporation must meet several criteria. It must be a domestic corporation, have no more than 100 shareholders, and all shareholders must be individuals, certain trusts, or estates. Additionally, the corporation cannot have any non-resident alien shareholders or more than one class of stock.
When should Form 2553 be filed?
Form 2553 should be filed within two months and 15 days after the beginning of the tax year for which the election is to take effect. For example, if a corporation wants to be treated as an S corporation for the tax year beginning on January 1, it must file Form 2553 by March 15 of that year. However, late elections can sometimes be accepted under certain circumstances.
How do I complete Form 2553?
Completing Form 2553 involves providing basic information about the corporation, including its name, address, and Employer Identification Number (EIN). The form also requires details about the shareholders, such as their names, addresses, and the number of shares they own. It is important to ensure that all information is accurate to avoid delays in processing.
What happens if Form 2553 is not filed?
If a corporation fails to file Form 2553, it will be taxed as a C corporation by default. This means that the corporation will face double taxation: once at the corporate level and again when dividends are distributed to shareholders. This can significantly increase the overall tax burden for the business and its owners.
Can a corporation revoke its S corporation status?
Yes, a corporation can revoke its S corporation status. This can be done by filing a statement with the IRS that includes the name of the corporation, the date of the revocation, and the signatures of shareholders holding more than 50% of the shares. Once revoked, the corporation will be treated as a C corporation going forward.
Are there any ongoing requirements after filing Form 2553?
After filing Form 2553 and being accepted as an S corporation, the business must continue to meet the eligibility requirements. This includes maintaining the limit on the number of shareholders, ensuring that all shareholders are eligible, and adhering to the one-class-of-stock rule. Regular compliance with tax filing and reporting obligations is also essential.
What are the tax benefits of electing S corporation status?
One of the primary benefits of electing S corporation status is the avoidance of double taxation. Income is passed through to shareholders, who report it on their personal tax returns. Additionally, S corporations can provide potential savings on self-employment taxes, as only the salaries paid to shareholders are subject to these taxes, while distributions are not.
Where can I find Form 2553?
Form 2553 can be found on the IRS website. It is available for download in PDF format, along with instructions for completing the form. Additionally, many tax professionals can assist with the preparation and filing of the form, ensuring that all requirements are met.

IRS 2553 Example

Note: Form 2553 begins on the next page.

Where To File Form 2553 after 6/17/19

If the corporation’s principal business, office,	Use the following address
or agency is located in	or fax number

Connecticut, Delaware, District of Columbia,	Department of the Treasury
Georgia, Illinois, Indiana, Kentucky, Maine,	Internal Revenue Service
Maryland, Massachusetts, Michigan, New	Kansas City, MO 64999
Hampshire, New Jersey, New York, North Carolina,
Ohio, Pennsylvania, Rhode Island, South Carolina,
Tennessee, Vermont, Virginia, West Virginia,	Fax # 855-887-7734
Wisconsin

Alabama, Alaska, Arizona, Arkansas, California,	Department of the Treasury
Colorado, Florida, Hawaii, Idaho, Iowa, Kansas,	Internal Revenue Service
Louisiana, Minnesota, Mississippi, Missouri,	Ogden, UT 84201
Montana, Nebraska, Nevada, New Mexico, North
Dakota, Oklahoma, Oregon, South Dakota, Texas,
Utah, Washington, Wyoming	Fax # 855-214-7520

Form 2553

(Rev. December 2017)

Department of the Treasury Internal Revenue Service

Election by a Small Business Corporation

(Under section 1362 of the Internal Revenue Code)

(Including a late election filed pursuant to Rev. Proc. 2013-30)

▶You can fax this form to the IRS. See separate instructions.

▶Go to www.irs.gov/Form2553 for instructions and the latest information.

OMB No. 1545-0123

Note: This election to be an S corporation can be accepted only if all the tests are met under Who May Elect in the instructions, all shareholders have signed the consent statement, an officer has signed below, and the exact name and address of the corporation (entity) and other required form information have been provided.

Part I		Election Information
		Name (see instructions)	A Employer identification number
Type
Type		Number, street, and room or suite no. If a P.O. box, see instructions.	B Date incorporated
or			B Date incorporated
or
Print
Print		City or town, state or province, country, and ZIP or foreign postal code	C State of incorporation
			C State of incorporation

D	Check	the applicable box(es) if the corporation (entity), after applying for the EIN shown in A above, changed its		name or	address

EElection is to be effective for tax year beginning (month, day, year) (see instructions) . . . . . . ▶

Caution: A corporation (entity) making the election for its first tax year in existence will usually enter the beginning date of a short tax year that begins on a date other than January 1.

FSelected tax year:

(1) Calendar year

(2) Fiscal year ending (month and day) ▶

(3) 52-53-week year ending with reference to the month of December

(4) 52-53-week year ending with reference to the month of ▶

If box (2) or (4) is checked, complete Part II.

GIf more than 100 shareholders are listed for item J (see page 2), check this box if treating members of a family as one shareholder results in no more than 100 shareholders (see test 2 under Who May Elect in the instructions) ▶

HName and title of officer or legal representative whom the IRS may call for more information

Telephone number of officer or legal representative

IIf this S corporation election is being filed late, I declare I had reasonable cause for not filing Form 2553 timely. If this late election is being made by an entity eligible to elect to be treated as a corporation, I declare I also had reasonable cause for not filing an entity classification election timely and the representations listed in Part IV are true. See below for my explanation of the reasons the election or elections were not made on time and a description of my diligent actions to correct the mistake upon its discovery. See instructions.

	Under penalties of perjury, I declare that I have examined this election, including accompanying documents, and, to the best of my
Sign knowledge and belief, the election contains all the relevant facts relating to the election, and such facts are true, correct, and complete.
Here	▲Signature of officer
		Title	Date
For Paperwork Reduction Act Notice, see separate instructions.		Cat. No. 18629R	Form 2553 (Rev. 12-2017)

Form 2553 (Rev. 12-2017)	Page 2
Name	Employer identification number

Part I Election Information (continued) Note: If you need more rows, use additional copies of page 2.

Name and address of each

shareholder or former shareholder required to consent to the election.

(see instructions)

Shareholder’s Consent Statement

Under penalties of perjury, I declare that I consent to the election of the above-named corporation (entity) to be an S corporation under section 1362(a) and that I have examined this consent statement, including accompanying documents, and, to the best of my knowledge and belief, the election contains all the relevant facts relating to the election, and such facts are true, correct, and complete. I understand my consent is binding and may not be withdrawn after the corporation (entity) has made a valid election. If seeking relief for a late filed election, I also declare under penalties of perjury that I have reported my income on all affected returns consistent with the S corporation election for the year for which the election should have been filed (see beginning date entered on line E) and for all subsequent years.

Signature

Date

Stock owned or

percentage of ownership

(see instructions)

Number of
shares or
percentage	Date(s)
of ownership	acquired

M
Social security
number or	N
employer	Shareholder’s
identification	tax year ends
number (see	(month and
instructions)	day)

Form 2553 (Rev. 12-2017)

Form 2553 (Rev. 12-2017)		Page 3
Name		Employer identification number

Part II	Selection of Fiscal Tax Year (see instructions)
Note: All corporations using this part must complete item O and item P, Q, or R.
O Check the applicable box to indicate whether the corporation is:
1.	A new corporation adopting the tax year entered in item F, Part I.
2.	An existing corporation retaining the tax year entered in item F, Part I.
3.	An existing corporation changing to the tax year entered in item F, Part I.

PComplete item P if the corporation is using the automatic approval provisions of Rev. Proc. 2006-46, 2006-45 I.R.B. 859, to request (1) a natural business year (as defined in section 5.07 of Rev. Proc. 2006-46) or (2) a year that satisfies the ownership tax year test (as defined in section 5.08 of Rev. Proc. 2006-46). Check the applicable box below to indicate the representation statement the corporation is making.

1. Natural Business Year ▶

I represent that the corporation is adopting, retaining, or changing to a tax year that qualifies

as its natural business year (as defined in section 5.07 of Rev. Proc. 2006-46) and has attached a statement showing separately for each month the gross receipts for the most recent 47 months. See instructions. I also represent that the corporation is not precluded by section 4.02 of Rev. Proc. 2006-46 from obtaining automatic approval of such adoption, retention, or change in tax year.

2. Ownership Tax Year ▶

I represent that shareholders (as described in section 5.08 of Rev. Proc. 2006-46) holding more

than half of the shares of the stock (as of the first day of the tax year to which the request relates) of the corporation have the same tax year or are concurrently changing to the tax year that the corporation adopts, retains, or changes to per item F, Part I, and that such tax year satisfies the requirement of section 4.01(3) of Rev. Proc. 2006-46. I also represent that the corporation is not precluded by section 4.02 of Rev. Proc. 2006-46 from obtaining automatic approval of such adoption, retention, or change in tax year.

Note: If you do not use item P and the corporation wants a fiscal tax year, complete either item Q or R below. Item Q is used to request a fiscal tax year based on a business purpose and to make a back-up section 444 election. Item R is used to make a regular section 444 election.

QBusiness Purpose—To request a fiscal tax year based on a business purpose, check box Q1. See instructions for details including payment of a user fee. You may also check box Q2 and/or box Q3.

1. Check here ▶ if the fiscal year entered in item F, Part I, is requested under the prior approval provisions of Rev. Proc. 2002-39, 2002-22 I.R.B. 1046. Attach to Form 2553 a statement describing the relevant facts and circumstances and, if applicable, the gross receipts from sales and services necessary to establish a business purpose. See the instructions for details regarding the gross receipts from sales and services. If the IRS proposes to disapprove the requested fiscal year, do you want a conference with the IRS National Office?

Yes

2.Check here ▶ to show that the corporation intends to make a back-up section 444 election in the event the corporation’s business purpose request is not approved by the IRS. See instructions for more information.

3.Check here ▶ to show that the corporation agrees to adopt or change to a tax year ending December 31 if necessary for the IRS to accept this election for S corporation status in the event (1) the corporation’s business purpose request is not approved and the corporation makes a back-up section 444 election, but is ultimately not qualified to make a section 444 election, or (2) the corporation’s business purpose request is not approved and the corporation did not make a back-up section 444 election.

RSection 444 Election—To make a section 444 election, check box R1. You may also check box R2.

1.Check here ▶ to show that the corporation will make, if qualified, a section 444 election to have the fiscal tax year shown in item F, Part I. To make the election, you must complete Form 8716, Election To Have a Tax Year Other Than a Required Tax Year, and either attach it to Form 2553 or file it separately.

2.Check here ▶ to show that the corporation agrees to adopt or change to a tax year ending December 31 if necessary for the IRS to accept this election for S corporation status in the event the corporation is ultimately not qualified to make a section 444 election.

Form 2553 (Rev. 12-2017)

Form 2553 (Rev. 12-2017)	Page 4
Name	Employer identification number

Part III Qualified Subchapter S Trust (QSST) Election Under Section 1361(d)(2)* Note: If you are making more than

one QSST election, use additional copies of page 4.

Income beneficiary’s name and address

Social security number

Trust’s name and address

Employer identification number

Date on which stock of the corporation was transferred to the trust (month, day, year) . . . . . . . . ▶

In order for the trust named above to be a QSST and thus a qualifying shareholder of the S corporation for which this Form 2553 is filed, I hereby make the election under section 1361(d)(2). Under penalties of perjury, I certify that the trust meets the definitional requirements of section 1361(d)(3) and that all other information provided in Part III is true, correct, and complete.

Signature of income beneficiary or signature and title of legal representative or other qualified person making the election

Date

*Use Part III to make the QSST election only if stock of the corporation has been transferred to the trust on or before the date on which the corporation makes its election to be an S corporation. The QSST election must be made and filed separately if stock of the corporation is transferred to the trust after the date on which the corporation makes the S election.

Part IV Late Corporate Classification Election Representations (see instructions)

If a late entity classification election was intended to be effective on the same date that the S corporation election was intended to be effective, relief for a late S corporation election must also include the following representations.

1The requesting entity is an eligible entity as defined in Regulations section 301.7701-3(a);

2The requesting entity intended to be classified as a corporation as of the effective date of the S corporation status;

3The requesting entity fails to qualify as a corporation solely because Form 8832, Entity Classification Election, was not timely filed under Regulations section 301.7701-3(c)(1)(i), or Form 8832 was not deemed to have been filed under Regulations section 301.7701-3(c)(1)(v)(C);

4The requesting entity fails to qualify as an S corporation on the effective date of the S corporation status solely because the S corporation election was not timely filed pursuant to section 1362(b); and

5a The requesting entity timely filed all required federal tax returns and information returns consistent with its requested classification as an S corporation for all of the years the entity intended to be an S corporation and no inconsistent tax or information returns have been filed by or with respect to the entity during any of the tax years, or

bThe requesting entity has not filed a federal tax or information return for the first year in which the election was intended to be effective because the due date has not passed for that year’s federal tax or information return.

Form 2553 (Rev. 12-2017)

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