Form 2553 guide
How to elect S Corp status: Form 2553 step-by-step.
IRS Form 2553 is the only way to elect S Corporation tax treatment for your LLC or corporation. This guide walks through the eligibility rules, deadlines, filing steps, state requirements, and what to do if you missed the deadline.
01 · Overview
What Form 2553 is and when to file it
The election form
Form 2553, Election by a Small Business Corporation, is filed with the IRS to elect S Corporation tax treatment for a qualifying entity. Once accepted, the entity is taxed as a pass-through S Corp for federal purposes — no entity-level income tax, with profits flowing through to shareholders on Schedule K-1.
The election does not change your legal entity type. An LLC that elects S Corp status remains an LLC under state law — it simply changes how the IRS taxes it. A C Corporation that elects S Corp status changes from a double-tax entity to a pass-through entity.
The standard deadline
For a calendar-year entity, Form 2553 must be filed by March 15 — the 15th day of the 3rd month of the tax year. For a fiscal-year entity, the deadline is the 15th day of the 3rd month of that fiscal year. Filing by this deadline makes the election retroactive to the first day of that tax year.
If you file after the deadline, the election takes effect for the next tax year — unless you qualify for late-election relief under Revenue Procedure 2013-30.
02 · Eligibility
Who can elect S Corp status
Your entity must meet all five requirements to file Form 2553. If any single requirement is not met, the IRS will reject the election.
Maximum 100 shareholders
The corporation or LLC must have 100 or fewer shareholders of record at the time of the election and at all times thereafter.
U.S. citizens or residents only
All shareholders must be U.S. citizens or resident aliens. Nonresident aliens, partnerships, most corporations, and certain trusts cannot be shareholders.
One class of stock
The entity can issue only one class of stock. Differences in voting rights within a single class are permitted, but no differences in distribution or liquidation rights.
Eligible entity types
C Corporations, LLCs (federally disregarded or electing), and certain qualifying foreign entities can elect S Corp status. Partnerships and sole proprietorships cannot.
Domestic entity
The entity must be organized in the United States. Foreign corporations are not eligible for S Corp election.
03 · Deadlines
Filing deadlines and late-election relief
Standard deadline
75th day of the tax year
- · Calendar-year entities: March 15
- · Fiscal-year entities: 15th day of the 3rd month
- · Election retroactive to day 1 of the tax year
- · No special statement required — just file on time
Late election relief
Revenue Procedure 2013-30
- · IRS allows reasonable cause for late elections
- · Attach a statement explaining why you missed the deadline
- · All shareholders must have reported income consistent with S Corp treatment for the year
- · File within 3 years and 75 days of the intended effective date
- · Late-filing relief does not apply if the entity previously had an election revoked within the past 5 years
04 · Filing instructions
Step-by-step Form 2553 filing
Confirm eligibility
Review the five eligibility requirements above. If your entity does not meet all five, the election will be rejected. If you have a multi-member LLC, you must first file Form 8832 to elect corporate classification before filing Form 2553.
Obtain or confirm your EIN
The entity must have a valid Employer Identification Number (EIN). If you formed an LLC, you likely already have one. If not, apply via IRS Form SS-4 or online at irs.gov.
Complete Form 2553
Part I — Entity Information: Enter the entity's legal name, address, EIN, and state of incorporation. Part II — Election Information: Check the box for S Corporation election and enter the first tax year for which the election is to take effect. If the election is for the current year, enter the calendar year ending December 31, 2026.
Obtain shareholder consent
Every shareholder on the date of election must sign Form 2553, or you must attach a separate consent statement. If a shareholder does not consent, that person is treated as if they sold their shares at fair market value on the first day of the S Corp election year.
Attach required schedules
If the entity was previously a C Corporation, attach Schedule B (Report of Shareholders of an S Corporation). If late-filing relief is being claimed, attach a statement referencing Revenue Procedure 2013-30 and explaining the reasonable cause for the late election.
File with the IRS
Mail Form 2553 to the IRS service center for your state, or file electronically if your software supports it. Retain a copy for your records. The IRS will send a confirmation letter (CP261) when the election is accepted.
State-level filings
The federal S Corp election does not automatically apply at the state level. Several states — including California (Form 100S), New York (CT-3/CT-4), and Texas — require a separate state S Corp election or franchise tax filing. Check with your state's tax authority.
05 · After filing
What happens after you file Form 2553
IRS confirmation
The IRS will review your Form 2553 and, if accepted, send you Letter CP261 confirming the S Corp election. Retain this letter permanently — it is your proof of election status. If the IRS needs additional information, they will send a letter requesting it before denying the election.
Federal compliance changes
Once the election is in effect, the entity must file Form 1120-S annually instead of Schedule C or partnership returns. If you have owner-employees, you must run payroll, file Form 941 quarterly, and issue W-2s. The entity no longer pays self-employment tax — only FICA on W-2 wages.
State-level filings required
The federal S Corp election does not automatically apply at the state level. Several states require a separate filing or impose distinct rules:
California
Form 100S
File with the FTB. California imposes an $800 minimum franchise tax even on S Corps. First-year exemption may apply.
New York
Form CT-3 or CT-4
S Corps file CT-3 or CT-4 with the NYS Department of Taxation and Finance. New York recognizes the federal election but requires a separate franchise tax return.
Texas
No separate election
Texas has no state income tax. S Corps are subject to the Texas Margin Tax (0.375% of total revenue). File Form 05-158-A annually.
Illinois
Form IL-1120-ST
Illinois imposes a 1.5% replacement tax on S Corp income. The federal election is recognized, but a state return is required.
Pennsylvania
Form REV-1630
Pennsylvania imposes a 3.07% personal income tax on S Corp income passed through to shareholders. No separate entity-level S Corp election is required.
06 · Revocation
How to revoke an S Corp election
The revocation process
To revoke S Corp status, shareholders holding more than 50% of the outstanding shares must consent. File a statement of revocation with the IRS service center where you file your returns. The statement must include the entity name, EIN, the first tax year the revocation applies to, and the date.
Timing and re-election restrictions
A revocation made on or before the 15th day of the 3rd month of the tax year applies to that tax year. After that date, it applies to the following tax year. Once revoked, the entity cannot re-elect S Corp status for 5 tax years unless the IRS consents to an earlier re-election under the termination-of-election rules in section 1362(g) of the Internal Revenue Code.
State-level revocation may also be required. California, New York, and other states with separate S Corp filings may require a corresponding state-level revocation or notification.
07 · FAQ
Frequently asked questions
When is the deadline to file Form 2553 for it to take effect for the current tax year?
Form 2553 must be filed by the 15th day of the 3rd month of the tax year. For a calendar-year entity, that is March 15. If you file after this deadline, the election takes effect for the next tax year unless you qualify for late-election relief.
What if I miss the deadline — can I still elect S Corp status?
Yes, if you qualify for late-election relief under Revenue Procedure 2013-30. The IRS allows a reasonable cause exception if you missed the deadline due to reasonable cause and not willful neglect. You must attach a statement to Form 2553 explaining the reason for the delay and demonstrate that the entity and all shareholders reported their income consistent with S Corp treatment for the year the election should have taken effect.
Does every shareholder need to sign Form 2553?
Yes. All shareholders on the date of election must consent. You can either have each shareholder sign the form or attach a separate written consent statement for each shareholder. If a shareholder does not consent, they are treated as having sold their shares on the first day of the S Corp election year.
Do I need to file Form 2553 every year?
No. The S Corp election is permanent unless revoked. Once the IRS accepts your election, the entity remains an S Corp for all subsequent tax years. You only need to file Form 2553 again if the election was previously revoked and you want to re-elect (subject to a 5-year waiting period).
Can a single-member LLC elect S Corp status?
Yes. A single-member LLC can elect S Corp treatment by filing Form 2553. By default, a single-member LLC is disregarded for federal tax purposes. The S Corp election changes the LLC to a corporation for tax purposes while maintaining its LLC legal structure under state law.
What happens after the IRS accepts my S Corp election?
You will receive IRS Letter CP261 confirming acceptance. After that, you must begin filing Form 1120-S annually, pay W-2 salary to owner-employees, file Form 941 quarterly for payroll taxes, and comply with any state-level S Corp filing requirements. The entity is no longer taxed as a sole proprietorship or partnership.
How do I revoke an S Corp election if I change my mind?
To revoke, the shareholders holding more than 50% of outstanding shares must consent. File a statement of revocation with the IRS service center where you file your returns. The revocation must specify the first tax year it applies to. A revocation made on or before the 15th day of the 3rd month of the tax year applies to that year. Revocation subject to a 5-year waiting period before re-electing.
Is there a state filing fee to elect S Corp status?
The federal election itself has no IRS filing fee. However, some states charge separate fees. California charges an $800 minimum franchise tax (with a first-year exemption for new entities). New York, Illinois, and other states may require separate state-level filings with their own fees. Check your specific state's requirements.
Model the federal payroll-tax benefit for your numbers.
Once you elect S Corp status, the payroll-tax savings begin. Use our calculator to see the estimated federal savings at your profit level and salary — updated for tax year 2026.