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For small business owners looking to optimize their tax situation, the IRS Form 2553 is a crucial document that can pave the way for significant savings. This form allows eligible corporations to elect S corporation status, which can lead to a more favorable tax treatment by allowing income, losses, and deductions to pass through directly to shareholders. By making this election, businesses can avoid the double taxation that typically applies to C corporations, where both the corporation and its shareholders are taxed on profits. However, the process of filing Form 2553 comes with its own set of requirements and deadlines that must be carefully navigated. Understanding the eligibility criteria, including the types of entities that can file and the specific timelines for submission, is essential for ensuring compliance and maximizing benefits. Additionally, the form requires detailed information about the corporation's structure, shareholders, and consent statements, making it imperative for business owners to prepare thoroughly before submission. Overall, Form 2553 serves as a powerful tool for small businesses aiming to enhance their financial efficiency while navigating the complexities of the tax landscape.
Similar forms
The IRS Form 8832, also known as the Entity Classification Election, is similar to Form 2553 in that it allows businesses to choose how they want to be classified for federal tax purposes. While Form 2553 is specifically for electing S corporation status, Form 8832 provides a broader range of classification options, including partnerships and disregarded entities. Both forms require the business to provide specific information about its structure and ownership, and both must be filed within a designated time frame to ensure that the desired tax treatment is applied. This makes both forms critical for businesses seeking to optimize their tax obligations.
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Form 1065, the U.S. Return of Partnership Income, shares similarities with Form 2553 in that it is used by entities that have chosen a specific tax classification. While Form 2553 is for S corporations, Form 1065 is for partnerships. Both forms require detailed information about the entity’s income, deductions, and distributions to owners. Additionally, both forms are crucial for ensuring compliance with IRS regulations, and the timely filing of each form is essential for the respective tax classifications to take effect.
Form 1120, the U.S. Corporation Income Tax Return, is another document related to Form 2553. While Form 2553 is the election form for S corporation status, Form 1120 is used by C corporations to report income, gains, losses, and deductions. Both forms require similar financial information and are part of the overall corporate tax compliance process. Understanding the differences between these forms is essential for businesses that need to navigate their tax responsibilities effectively.
The IRS Form 941, the Employer's Quarterly Federal Tax Return, is also relevant in the context of S corporations. While Form 2553 is about the election of S corporation status, Form 941 is used to report income taxes, Social Security tax, and Medicare tax withheld from employee wages. Both forms reflect the financial activities of a business and are critical for maintaining compliance with federal tax obligations. S corporations must file Form 941 to report their payroll taxes, making it a vital document in conjunction with Form 2553.
Lastly, Form 1065-B, the Return of Income for Electing Large Partnerships, bears resemblance to Form 2553 in that it addresses specific types of business entities that have elected a certain tax classification. While Form 2553 is for S corporations and Form 1065-B is for large partnerships, both forms serve to inform the IRS about the entity’s income and tax status. Each form requires accurate reporting and adherence to deadlines to ensure the entity's chosen tax status is recognized by the IRS.
Form Specifications
| Fact Name | Description |
|---|---|
| Purpose | The IRS Form 2553 is used by eligible small businesses to elect S Corporation status for federal tax purposes. |
| Eligibility | To qualify, a business must meet specific criteria, including having 100 or fewer shareholders and only one class of stock. |
| 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. |
| State-Specific Forms | Some states have their own forms for S Corporation election, such as California Form 100S, governed by California Revenue and Taxation Code Section 23800. |
| Shareholder Requirements | All shareholders must be individuals, certain trusts, or estates; corporations and partnerships cannot be shareholders. |
| Revocation | Once elected, the S Corporation status can be revoked, but this requires careful consideration and adherence to IRS guidelines. |
| Tax Implications | Electing S Corporation status allows income to pass through to shareholders, avoiding double taxation at the corporate level. |
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Sample - IRS 2553 Form
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 |
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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, |
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Ohio, Pennsylvania, Rhode Island, South Carolina, |
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Tennessee, Vermont, Virginia, West Virginia, |
Fax # |
Wisconsin |
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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 |
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Dakota, Oklahoma, Oregon, South Dakota, Texas, |
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Utah, Washington, Wyoming |
Fax # |
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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.
▶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.
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 |
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Election Information |
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Name (see instructions) |
A Employer identification number |
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Number, street, and room or suite no. If a P.O. box, see instructions. |
B Date incorporated |
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City or town, state or province, country, and ZIP or foreign postal code |
C State of incorporation |
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D |
Check |
the applicable box(es) if the corporation (entity), after applying for the EIN shown in A above, changed its |
name or |
address |
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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)
(4)
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.
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Under penalties of perjury, I declare that I have examined this election, including accompanying documents, and, to the best of my |
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Sign knowledge and belief, the election contains all the relevant facts relating to the election, and such facts are true, correct, and complete. |
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Here |
▲Signature of officer |
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Title |
Date |
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For Paperwork Reduction Act Notice, see separate instructions. |
Cat. No. 18629R |
Form 2553 (Rev. |
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Form 2553 (Rev. |
Page 2 |
Name |
Employer identification number |
Part I Election Information (continued) Note: If you need more rows, use additional copies of page 2.
J
Name and address of each
shareholder or former shareholder required to consent to the election.
(see instructions)
K
Shareholder’s Consent Statement
Under penalties of perjury, I declare that I consent to the election of the
Signature |
Date |
L
Stock owned or
percentage of ownership
(see instructions)
Number of |
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shares or |
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percentage |
Date(s) |
of ownership |
acquired |
M |
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Social security |
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number or |
N |
employer |
Shareholder’s |
identification |
tax year ends |
number (see |
(month and |
instructions) |
day) |
Form 2553 (Rev.
Form 2553 (Rev. |
Page 3 |
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Name |
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Employer identification number |
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Part II |
Selection of Fiscal Tax Year (see instructions) |
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Note: All corporations using this part must complete item O and item P, Q, or R. |
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O Check the applicable box to indicate whether the corporation is: |
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A new corporation adopting the tax year entered in item F, Part I. |
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2. |
An existing corporation retaining the tax year entered in item F, Part I. |
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3. |
An existing corporation changing to the tax year entered in item F, Part I. |
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PComplete item P if the corporation is using the automatic approval provisions of Rev. Proc.
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.
2. Ownership Tax Year ▶ |
I represent that shareholders (as described in section 5.08 of Rev. Proc. |
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.
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
QBusiness
1. Check here ▶ 
if the fiscal year entered in item F, Part I, is requested under the prior approval provisions of Rev. Proc.
Yes |
No |
2.Check here ▶ 
to show that the corporation intends to make a
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
RSection 444
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.
Form 2553 (Rev. |
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 |
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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
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
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.