WebLearn
Homepage ↝ Blank IRS 2553 Form
Outline

The IRS Form 2553 plays a pivotal role for small business owners seeking to elect S corporation status for their companies. This form allows eligible corporations to be taxed as S corporations, which can lead to significant tax advantages, such as avoiding double taxation on corporate income. Completing the form requires careful attention to detail, including providing essential information about the corporation, its shareholders, and the tax year for which the election is being made. Timeliness is crucial; the form must be filed within a specific window after the corporation's formation or the beginning of the tax year. Additionally, all shareholders must consent to the election, and their signatures are required on the form. Understanding the nuances of Form 2553 is vital for ensuring compliance with IRS regulations and maximizing potential benefits for your business. Navigating this process can be daunting, but taking the right steps can set your corporation on a path to financial efficiency and growth.

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

 

 

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

 

 

 

 

 

 

Number, street, and room or suite no. If a P.O. box, see instructions.

B Date incorporated

 

or

 

 

 

 

 

 

 

 

 

Print

 

 

 

 

 

 

City or town, state or province, country, and ZIP or foreign postal code

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.

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 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

L

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

No

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)

Click for PDF

Form Information

Fact Name Details
Purpose The IRS Form 2553 is used by small businesses to elect S corporation status for tax purposes.
Eligibility To qualify, a corporation must meet specific requirements, including having no more than 100 shareholders.
Filing Deadline The form must be filed within 75 days of the start of the tax year for which the election is to take effect.
Shareholder Requirements All shareholders must be U.S. citizens or residents. Certain entities, like corporations and partnerships, cannot be shareholders.
State Forms Some states require separate forms for S corporation election. For example, California uses Form 100S.
Governing Law (California) California Revenue and Taxation Code Section 23802 governs S corporation elections.
Tax Implications By electing S corporation status, the business can avoid double taxation on corporate income.
Revocation To revoke S corporation status, Form 8832 must be filed. This process requires careful consideration.
Amendments If changes occur, businesses may need to file a new Form 2553 to update their election status.

Detailed Guide for Filling Out IRS 2553

Filling out IRS Form 2553 is an important step for businesses that want to elect to be treated as an S corporation for tax purposes. Once the form is completed and submitted, the IRS will review it to ensure compliance with the requirements for S corporation status.

  1. Obtain the IRS Form 2553. You can download it from the IRS website or request a paper copy.
  2. Fill in the basic information about your corporation in Part I. This includes the name of the corporation, its address, and the Employer Identification Number (EIN).
  3. Indicate the date of incorporation and the state in which your corporation was formed.
  4. In Part I, check the box indicating the type of entity you are electing to treat as an S corporation.
  5. List the shareholders in Part II. Provide their names, addresses, and the number of shares owned by each shareholder.
  6. In Part III, indicate the tax year you wish to adopt. Most corporations use the calendar year, but you may select a different fiscal year if it meets IRS requirements.
  7. Sign and date the form. Ensure that all shareholders also sign the form, as required.
  8. Submit the completed Form 2553 to the appropriate IRS address, which is specified in the form's instructions.
  9. Keep a copy of the completed form for your records.

Obtain Answers on IRS 2553

  1. What is IRS Form 2553?

    IRS Form 2553 is a document that allows a corporation or an eligible entity to elect to be taxed as an S corporation. This election can provide significant tax benefits, including avoiding double taxation on corporate income. By filing this form, the entity can pass income, losses, deductions, and credits directly to its shareholders, who then report these items on their personal tax returns.

  2. Who is eligible to file Form 2553?

    To qualify for S corporation status, the entity must meet certain criteria. These include:

    • Being a domestic corporation or a qualifying entity.
    • Having no more than 100 shareholders.
    • Having only allowable shareholders, which include individuals, certain trusts, and estates.
    • Having only one class of stock.

    If the entity meets these requirements, it can file Form 2553 to elect S corporation status.

  3. When should Form 2553 be filed?

    Form 2553 should generally be filed within two months and 15 days after the beginning of the tax year the election is to take effect. For example, if a corporation wishes to be taxed as an S corporation for the tax year beginning January 1, it must file the form by March 15 of that year. However, there are provisions for late elections in certain circumstances, which may allow an entity to still obtain S corporation status even if the deadline has passed.

  4. What happens after Form 2553 is filed?

    Once Form 2553 is submitted, the IRS will review the application. If approved, the entity will receive a confirmation letter. This letter will serve as proof of the S corporation election. It is crucial for the entity to maintain compliance with S corporation requirements going forward, as failing to do so could result in the loss of S corporation status.

  5. Are there any drawbacks to electing S corporation status?

    While there are many benefits to electing S corporation status, there are also some potential drawbacks. For instance:

    • Shareholder restrictions may limit the ability to raise capital.
    • All shareholders must be U.S. citizens or residents.
    • There are strict rules regarding the distribution of profits and losses.

    Entities should carefully consider these factors and consult with a tax professional before making the election.

Common mistakes

Filing the IRS Form 2553, which is used to elect S Corporation status, can be a straightforward process, but many individuals make common mistakes that can lead to complications. One frequent error is failing to meet the deadline. The form must be filed within a specific timeframe, typically within 75 days of the beginning of the tax year. Missing this deadline can result in the loss of S Corporation status for the entire year.

Another mistake involves incorrect eligibility checks. Not all businesses qualify for S Corporation status. For instance, a corporation must have no more than 100 shareholders, and all shareholders must be U.S. citizens or residents. If these criteria are overlooked, the form may be rejected, causing delays and potential tax implications.

Inaccurate or incomplete information is another pitfall. Individuals often misstate their business's name, address, or Employer Identification Number (EIN). Such inaccuracies can lead to processing issues. It's crucial to double-check all entries to ensure they match official records.

Many people also neglect to sign and date the form. An unsigned form is considered incomplete, which can prevent the IRS from processing the election. This simple oversight can result in significant delays in obtaining S Corporation status.

Some filers mistakenly believe that they can submit the form electronically. The IRS requires Form 2553 to be submitted via mail, which can lead to confusion. Understanding the proper submission method is essential to avoid processing errors.

Another common error is failing to include all required shareholder consents. Each shareholder must sign the form to indicate their agreement to the S Corporation election. Omitting any signatures can invalidate the election, leading to unwanted tax consequences.

Additionally, individuals often misinterpret the tax implications of electing S Corporation status. While there are benefits, such as avoiding double taxation, there are also responsibilities. Failing to understand these can lead to unanticipated tax liabilities.

People sometimes overlook the importance of keeping a copy of the submitted form. Without documentation, it can be challenging to prove that the election was made, should questions arise in the future. Maintaining records is a vital part of the process.

Finally, many filers do not seek professional assistance when needed. The complexities of tax law can be daunting, and consulting a tax professional can help avoid mistakes. Engaging an expert can provide clarity and ensure compliance with IRS regulations.

Documents used along the form

When electing to be treated as an S corporation, the IRS Form 2553 is crucial. However, it is often accompanied by other forms and documents that help ensure compliance with tax regulations and support the election process. Below is a list of commonly used forms and documents that may be needed alongside Form 2553.

  • IRS Form 1120S: This is the annual tax return for S corporations. Once the election is approved, this form must be filed each year to report income, deductions, and credits.
  • IRS Form 941: This form is used to report payroll taxes withheld from employees' paychecks. S corporations with employees must file this quarterly to report income taxes, Social Security, and Medicare taxes.
  • IRS Form W-2: Employers use this form to report wages paid to employees and the taxes withheld. It is essential for employees to accurately file their personal income tax returns.
  • IRS Form W-3: This is a summary form that accompanies Form W-2. It provides the Social Security Administration with a summary of all W-2 forms issued by the S corporation.
  • State S Corporation Election Form: Some states require a separate form to elect S corporation status at the state level. This form varies by state and is necessary for state tax purposes.
  • Operating Agreement: While not always required, this document outlines the management structure and operating procedures of the S corporation, ensuring clarity among shareholders.
  • Shareholder Consent: A written consent form from all shareholders is often needed to approve the S corporation election. This ensures that all parties are in agreement with the election.
  • Form 8832: This form is used to elect how a business entity will be classified for federal tax purposes. It may be relevant if the business is changing its classification.

Understanding these forms and documents can help streamline the process of electing S corporation status and maintaining compliance with tax obligations. It is advisable to consult with a tax professional to ensure that all necessary paperwork is completed accurately and timely.

Similar forms

The IRS Form 2553 is essential for small businesses electing to be taxed as an S corporation. Several other forms share similarities with Form 2553 in purpose or function. Here’s a breakdown of those forms:

  • IRS Form 1120S: This form is used by S corporations to report income, deductions, and credits. While Form 2553 is for election, Form 1120S is for annual reporting after the election is made.
  • IRS Form 1065: Partnerships use this form to report income, deductions, and other tax information. Like Form 2553, it facilitates tax treatment for a specific business structure, though it applies to partnerships instead of corporations.
  • IRS Form 941: Employers use this form to report payroll taxes. It shares a similar purpose in tracking business financials, but it focuses specifically on employment taxes rather than the election of tax status.
  • IRS Form 4868: This is an application for an automatic extension of time to file an individual income tax return. It is similar in that it requires timely submission to the IRS, though its purpose is to extend filing time rather than elect tax status.
  • IRS Form 8832: This form allows entities to elect how they will be classified for federal tax purposes. Like Form 2553, it is about choosing a tax structure, but it applies to various business entities, not just S corporations.
  • IRS Form 1040: This is the standard individual income tax return form. While it serves a different audience, it is similar in that it is a fundamental document for reporting income and is crucial for tax compliance.

Dos and Don'ts

Filling out the IRS Form 2553 can be a crucial step for small businesses looking to elect S corporation status. Here’s a helpful list of things to keep in mind while completing this form:

  • Do read the instructions carefully before starting. Understanding the requirements will save you time and potential errors.
  • Do ensure that all shareholders consent to the S corporation election. Their agreement is essential for the form to be valid.
  • Do file the form on time. The deadline is typically 75 days from the start of the tax year you want the S corporation status to take effect.
  • Do provide accurate information about your business, including the name, address, and Employer Identification Number (EIN).
  • Don't forget to double-check for any missing signatures. An unsigned form can lead to delays or rejections.
  • Don't use outdated forms. Always download the latest version from the IRS website to ensure compliance.
  • Don't overlook the need for a valid reason if you are filing late. If you miss the deadline, you may need to explain why to the IRS.
  • Don't assume that simply submitting the form guarantees approval. The IRS may still review and question your eligibility.

By following these guidelines, you can navigate the process of filling out Form 2553 more smoothly. Taking the time to get it right can lead to significant benefits for your business.

Misconceptions

The IRS Form 2553 is an important document for businesses electing to be treated as an S corporation. However, several misconceptions surround this form. Below is a list of common misunderstandings, along with clarifications.

  1. Only large businesses can file Form 2553.

    This is not true. Any eligible small business can file for S corporation status, regardless of size.

  2. Filing Form 2553 is the same as filing taxes.

    Form 2553 is an election form, not a tax return. It notifies the IRS of your choice to be taxed as an S corporation.

  3. Once filed, you cannot change your S corporation status.

    Businesses can revoke their S corporation status by filing a specific form with the IRS, allowing for changes if necessary.

  4. All businesses qualify for S corporation status.

    Not all businesses can elect S corporation status. Certain restrictions apply, including limitations on the number of shareholders and types of shareholders.

  5. Form 2553 must be filed every year.

    Once an S corporation election is approved, you do not need to file Form 2553 annually. It remains in effect until revoked.

  6. There is no deadline for filing Form 2553.

    There is a specific deadline. Generally, Form 2553 must be filed within 75 days of the beginning of the tax year for which the election is to take effect.

  7. Form 2553 can be filed electronically.

    Currently, Form 2553 must be submitted via mail. Electronic filing is not available for this form.

  8. All shareholders must agree to the S corporation election.

    While most shareholders must consent, in certain situations, not all shareholders are required to sign the form.

  9. Filing Form 2553 guarantees tax savings.

    While S corporation status can provide tax benefits, it does not guarantee savings. Each business's situation is unique and should be evaluated carefully.

Key takeaways

When filling out and using the IRS Form 2553, there are several important points to keep in mind. Here are some key takeaways:

  • The IRS Form 2553 is used to elect S corporation status for your business.
  • It must be filed within 75 days of the beginning of the tax year you want the S corporation status to take effect.
  • All shareholders must consent to the S corporation election by signing the form.
  • Make sure to provide accurate information, including your business's name, address, and Employer Identification Number (EIN).
  • If the form is filed late, you may still qualify for relief under certain circumstances, but it’s important to understand the rules around late elections.

Taking these points into account can help ensure a smoother process when electing S corporation status for your business.