IRS 2553 PDF Template

The IRS Form 2553 is a crucial document that allows a corporation to elect to be taxed as an S corporation, providing potential tax benefits for eligible businesses. By making this election, companies can avoid double taxation on corporate income, which is a significant advantage for many small business owners. Understanding the requirements and implications of this form is essential for anyone considering this tax status.

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Article Guide

When it comes to structuring a business, choosing the right tax classification can significantly impact your financial health. One important tool for small business owners is the IRS Form 2553, which allows eligible entities to elect S Corporation status. This designation offers several tax advantages, such as avoiding double taxation on corporate income. By filing this form, a corporation or limited liability company (LLC) can pass its income, losses, and deductions directly to shareholders, who report these amounts on their personal tax returns. However, the process isn't as simple as it sounds; there are specific eligibility requirements, deadlines, and potential pitfalls to navigate. Understanding how to properly complete and submit Form 2553 is crucial for any business owner looking to optimize their tax situation. From determining eligibility to ensuring timely filing, this form plays a pivotal role in the tax landscape for small businesses across the United States.

IRS 2553 Preview

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)

↓ IRS 2553

File Properties

Fact Name	Description
Purpose	The IRS Form 2553 is used by eligible small businesses to elect S corporation status for tax purposes.
Eligibility	To qualify, a corporation must have 100 or fewer shareholders and meet specific IRS criteria.
Filing Deadline	The form must be filed within 75 days of the beginning of the tax year when the S corporation election is desired.
State Requirements	Some states require a separate election for S corporation status, governed by state-specific laws.
Form Components	The form requires basic information about the corporation, including name, address, and tax identification number.
Shareholder Consent	All shareholders must consent to the S corporation election, which is documented on the form.
Tax Benefits	Electing S corporation status can provide tax benefits, including avoiding double taxation on corporate income.
Revocation	Once elected, the S corporation status can be revoked, but specific procedures must be followed as outlined by the IRS.

Instructions on Utilizing IRS 2553

Filling out the IRS Form 2553 is an important step for businesses looking to elect S corporation status. This process requires careful attention to detail to ensure that the form is completed accurately. Below are the steps to guide you through filling out the form.

Begin by downloading the IRS Form 2553 from the IRS website or obtain a physical copy.
Provide the name of your corporation as it appears on your Articles of Incorporation in the designated section.
Fill in the address of your corporation, including the city, state, and ZIP code.
Enter the Employer Identification Number (EIN) assigned to your corporation. If you do not have one, you will need to apply for it before completing the form.
Indicate the date your corporation was formed and the state in which it was incorporated.
Choose the tax year you wish to adopt for your corporation. This will typically be the calendar year unless you have a specific reason for a different fiscal year.
List the names and addresses of all shareholders, including their Social Security numbers and the number of shares they own.
Check the box if your corporation has a 501(c)(3) status or if it is a qualified subchapter S subsidiary.
Sign and date the form. Ensure that an authorized officer of the corporation is the one signing.
Submit the completed form to the appropriate IRS address based on your corporation’s location.

Once the form is submitted, you will await confirmation from the IRS regarding your S corporation election. It is essential to keep a copy of the completed form for your records. If you have any questions during this process, consider consulting a tax professional for assistance.

Important Facts about IRS 2553

What is IRS Form 2553?

IRS Form 2553 is a document that allows small businesses to elect to be taxed as an S Corporation. This election can provide significant tax advantages, such as avoiding double taxation on corporate income. By filing this form, a business can pass income, losses, deductions, and credits directly to shareholders, who then report these amounts on their personal tax returns. This can lead to potential savings on self-employment taxes for owners actively involved in the business.

Who is eligible to file Form 2553?

To be eligible to file Form 2553, a business must meet certain criteria. First, it must be a domestic corporation, meaning it is incorporated in the United States. Additionally, the corporation can have no more than 100 shareholders, and all shareholders must be individuals, certain trusts, or estates. Furthermore, the corporation can only have one class of stock, although differences in voting rights are permitted. If these conditions are met, the business can benefit from S Corporation status.

When should I file Form 2553?

Timing is crucial when it comes to filing Form 2553. Generally, the form must be submitted within two months and 15 days after the beginning of the tax year when the S Corporation status is desired. For example, if a business wants to be treated as an S Corporation for the 2024 tax year, it should file the form by March 15, 2024. However, if you miss this deadline, there may still be options available to request late election relief, but it's best to act promptly to avoid complications.

What happens after I file Form 2553?

After submitting Form 2553, the IRS will review the application. If approved, the corporation will receive confirmation of its S Corporation status. This approval allows the business to start enjoying the tax benefits associated with this classification. It's essential to maintain compliance with ongoing requirements, such as filing annual tax returns and ensuring that all shareholders remain eligible. Keeping good records and staying informed about any changes in tax laws will help ensure that the business continues to meet the criteria for S Corporation status.

Common mistakes

Filing the IRS Form 2553 is a crucial step for businesses seeking S corporation status. However, several common mistakes can lead to delays or rejections. One frequent error is failing to meet the filing deadline. The form must be submitted within 75 days of the beginning of the tax year in which the S corporation election is to take effect. Missing this deadline can result in the loss of S corporation status for the entire year.

Another common mistake is not providing accurate information about the business. This includes the legal name, address, and Employer Identification Number (EIN). Inaccuracies can cause confusion and may lead to the IRS rejecting the form. It is essential to double-check all entries for correctness before submission.

Some applicants overlook the requirement for all shareholders to sign the form. Each shareholder must consent to the S corporation election, and missing signatures can invalidate the application. It is important to ensure that all relevant parties have reviewed and signed the document.

Another mistake involves misunderstanding the eligibility criteria for S corporations. Not all businesses qualify, and common disqualifiers include having more than 100 shareholders or having non-resident alien shareholders. It is advisable to review the eligibility requirements thoroughly before filing.

Additionally, some individuals fail to provide the necessary information regarding the business's tax year. The form requires specific details about the tax year the business intends to use. Incorrect information can lead to complications with the IRS and may delay the processing of the form.

People often neglect to include any required attachments. If there are additional documents that support the application, such as a statement explaining the business structure, these should be included. Omitting these documents can result in processing delays.

Lastly, failing to keep a copy of the submitted form is a common oversight. It is important to retain a copy for your records, as it can be useful for future reference or in case of an inquiry from the IRS. Keeping organized records helps ensure compliance and simplifies future filings.

Documents used along the form

The IRS Form 2553 is essential for businesses electing to be treated as an S Corporation for tax purposes. However, several other forms and documents are often used in conjunction with it to ensure compliance with IRS regulations and to facilitate the smooth operation of the business. Below is a list of these important forms and documents.

IRS Form 1120S: This is the annual tax return form that S Corporations must file. It reports the income, deductions, gains, and losses of the corporation. Shareholders receive a Schedule K-1 from this form, detailing their share of the corporation's income.
IRS Form 941: Employers use this form to report payroll taxes. It includes information about wages paid, tips received, and federal income tax withheld from employees. This form is filed quarterly.
IRS Form 940: This form is used to report and pay unemployment taxes. Employers must file it annually and it helps ensure compliance with federal unemployment tax obligations.
State S Corporation Election Form: Some states require a separate form to be filed for S Corporation status. This form varies by state and is necessary for state tax purposes.
Operating Agreement: While not a formal requirement, an operating agreement outlines the management structure and operating procedures of the S Corporation. It is essential for clarifying roles and responsibilities among shareholders.
Shareholder Agreement: This document details the rights and responsibilities of shareholders. It can address issues such as the transfer of shares, decision-making processes, and dispute resolution among shareholders.

Each of these forms and documents plays a crucial role in the overall functioning and compliance of an S Corporation. Ensuring that all necessary paperwork is completed accurately and submitted on time can help avoid potential issues with the IRS and state tax authorities.

Similar forms

The IRS Form 2553 is used by small businesses to elect S Corporation status. Several other documents serve similar purposes in terms of tax elections, entity formation, or compliance. Here’s a list of nine documents that share similarities with Form 2553:

IRS Form 8832: This form is used to elect a different tax classification for an entity, such as choosing to be treated as a corporation or partnership for federal tax purposes.
IRS Form 1065: Partnerships file this form to report income, deductions, and other tax information. It is similar in that it requires detailed financial reporting.
IRS Form 1120: Corporations use this form to report their income and pay corporate taxes. Like Form 2553, it is essential for tax compliance.
IRS Form 941: Employers use this form to report payroll taxes. It involves similar filing requirements and deadlines as Form 2553.
IRS Form 1040: Individual taxpayers file this form to report personal income. It includes sections for reporting income from S Corporations.
IRS Form 1065 Schedule K-1: This document provides each partner's share of income, deductions, and credits, paralleling the information required for S Corporation shareholders.
IRS Form 1120-S: This is the tax return filed by S Corporations, similar to how Form 2553 is used to elect S Corporation status.
State S Corporation Election Forms: Many states have their own forms for electing S Corporation status, similar to Form 2553 at the federal level.
IRS Form 2553-A: This is a simplified version of Form 2553 for certain eligible entities, making the election process easier while maintaining similar requirements.

Each of these documents plays a vital role in the tax and compliance landscape for businesses, ensuring proper classification and reporting of income and taxes.

Dos and Don'ts

When filling out the IRS Form 2553, attention to detail is crucial. Here are some important dos and don’ts to keep in mind:

Do ensure that you meet the eligibility requirements to elect S corporation status.
Do provide accurate information regarding your corporation's name and address.
Do check the deadlines for submitting the form to avoid penalties.
Do include all shareholders' consent signatures on the form.
Do keep a copy of the completed form for your records.

Don't leave any sections blank; incomplete forms can lead to rejection.
Don't use incorrect tax year information, as this can cause confusion.
Don't forget to file the form within the required timeframe after incorporation.
Don't assume that electronic submission is available; check the IRS guidelines.

Taking these steps seriously can help ensure a smooth process when electing S corporation status. Be thorough and timely in your submission to avoid complications.

Misconceptions

The IRS Form 2553 is used by small businesses to elect to be taxed as an S corporation. However, many misconceptions surround this form. Here are nine common misunderstandings:

Form 2553 is only for new businesses.
This is not true. Existing businesses can also file Form 2553 to change their tax status to that of an S corporation.
Filing Form 2553 guarantees S corporation status.
While the form is necessary, the IRS must approve the election. If certain criteria are not met, the election may be denied.
All businesses can file Form 2553.
Not every business qualifies. Only domestic corporations that meet specific requirements can elect S corporation status.
Form 2553 can be filed at any time.
There are deadlines for filing. Generally, the form must be submitted within 75 days of the beginning of the tax year for which the election is to take effect.
Once filed, the S corporation status is permanent.
This is misleading. An S corporation can lose its status if it fails to meet eligibility requirements or if it voluntarily revokes the election.
There are no tax implications when filing Form 2553.
In reality, electing S corporation status can have significant tax implications, both positive and negative. It is important to understand these before making the election.
All shareholders must be U.S. citizens.
While most shareholders must be U.S. citizens or residents, certain trusts and estates can also be shareholders in an S corporation.
Form 2553 is the only form needed for S corporation election.
In addition to Form 2553, businesses may need to file other forms depending on their specific circumstances, such as state forms or additional federal forms.
Filing Form 2553 is a simple process.
While the form itself is straightforward, the eligibility criteria and potential tax implications can make the process complex. It’s often wise to consult with a tax professional.

Key takeaways

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

Eligibility Requirements: Ensure your business meets the eligibility criteria for S corporation status. This includes having no more than 100 shareholders and only one class of stock.
Filing Deadline: Submit Form 2553 within 75 days of the beginning of the tax year for which the election is to take effect. Late submissions may result in the loss of S corporation status for that year.
Shareholder Consent: All shareholders must consent to the S corporation election. This is typically done by signing the form, so ensure everyone is on board.
Annual Requirements: Once the election is made, comply with ongoing requirements to maintain S corporation status, including filing annual tax returns and adhering to specific operational guidelines.