Form 2553 is a tax form on which owners of an LLC or corporation can elect for their business entity to be taxed as an S corporation for federal income tax purposes.
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How Form 2553 Works
For many business owners, electing for their business to be treated as an S corporation for tax purposes will save them on taxes as well as provide other benefits.
However, in order for one’s business to be treated as an S corporation, the business must communicate this desire to the IRS via an election and the IRS must approve this election.
This election is made on Form 2553.
When to File Form 2553
Form 2553 must be filed either during the tax year that precedes the tax year for which you want the S corporation to take effect or no more than two months and 15 days from the beginning of the tax year you want the S corporation to take effect.
So if you want your business’s S corporation election to take effect on January 1, 2022, you can file Form 2553 any time between January 1, 2021, until March 15, 2022.
If you miss this original deadline, you may be able to qualify for late election relief.
How To Fill Out Form 2553
Form 2553 has four parts. Part I must be completed by all businesses electing to be treated as an S corporation.
- Name: Input the true name of the business as stated in its formation documents filed with the Secretary of State.
- Address: Input the business’s mailing address in the appropriate lines.
- Item A: Input the business’s employer identification number (EIN) obtained from the IRS.
- Item B: Input the date the business was formed with the Secretary of State for its state.
- Item C: Input the state the business was formed in.
- Item D: If the business changed its name and/or address after applying for its EIN, check the applicable box.
- Item E: Indicate the start date of the tax year for which you intend the S corporation election to take effect. For example, if you want your business to be treated as an S corporation for all of calendar year 2022, input “January 1, 2022” on this line.
- Item F: Check the box indicating what kind of tax year you want your S corporation to be on for tax purposes. Most businesses are on a calendar year — beginning January 1 and ending December 31 — but others opt for a fiscal year ending on some other date than December 31 or a 52-53-week year that always ends on the same day of the week.
- Item G: One of the S corporation requirements is that the S corporation have no more than 100 shareholders. However, certain members of the same family (including their states) can be counted as one shareholder for purposes of this requirement. If your S corporation needs to do this in order to meet the no-more-than-100-shareholders requirement, check the box on Line G.
- Item H: Indicate the name and title of the officer or legal representative of the business for tax purposes along with this individual’s phone number.
- Item I: If you’re filing your S corporation election late, this is the section where you make your reasonable cause statement letting the IRS know why they should accept your S corporation election even though it’s late.
- Column J: Each shareholder’s name and address must be given its own row.
- Column K: Each shareholder must sign and date in this column.
- Column L: Indicate each shareholders number of shares owned or percentage ownership as well as the date or dates when they acquired their shares.
- Column M: Indicate each shareholder’s social security number or employer identification number.
- Column N: Indicate the date on which each shareholder’s tax year ends.
Finally, when you have completed the Form 2553, an officer of the business must sign and date at the bottom of the first page, indicating their title as well.
Also indicate the business’s legal name and employer identification number at the top of each page of Form 2553.
Where to File Form 2553
Where you file Form 2553 depends both on where you live as well as whether you want to mail the form or fax it.
If you mail the form, be sure to make a copy of completed, signed form, and mail the original to the IRS.
| If the Business's Principal Business Offer Is in: | And You Want to File by Mail, Mail To: | And You Want to File by Fax, Fax to: |
|---|---|---|
| Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, West Virginia, Wisconsin | Department of the Treasury Internal Revenue Service Center Kansas City, MO 64999 | 855-887-7734 |
| Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming | Department of the Treasury Internal Revenue Service Center Ogden, UT 84201 | 855-214-7520 |
What Happens After You File Form 2553?
After you file Form 2553 and the IRS processes it, the IRS will send your business a letter with its decision whether or not your S corporation is approved.
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
