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The IRS Form 2553 plays a crucial role for small business owners looking to elect S Corporation status, a designation that can offer significant tax benefits. By submitting this form, eligible entities can choose to be taxed as an S Corporation, allowing them to avoid double taxation on corporate income. The form requires detailed information, including the entity's name, address, and the date of incorporation, as well as the signatures of all shareholders. It is essential to file the form within a specific timeframe—generally within 75 days of the beginning of the tax year—to ensure the election is effective for that year. Additionally, the form includes a section for shareholders to consent to the S Corporation election, highlighting the importance of collaboration among owners. Understanding the nuances of Form 2553 is vital for any business considering this election, as it can significantly impact tax obligations and overall financial strategy.

Dos and Don'ts

When filling out the IRS 2553 form, it's important to follow specific guidelines to ensure your submission is accurate and timely. Here are some things you should and shouldn't do:

  • Do: Review the instructions carefully before starting the form.
  • Do: Ensure all information is accurate and complete to avoid delays.
  • Do: File the form within the required timeframe to ensure your election is valid.
  • Do: Keep a copy of the completed form for your records.
  • Don't: Forget to sign and date the form before submitting it.
  • Don't: Leave any required fields blank; this can lead to rejection.
  • Don't: Submit the form without verifying that all calculations are correct.
  • Don't: Ignore any correspondence from the IRS after submission; respond promptly if needed.

Document Attributes

Fact Name Description
Purpose The IRS Form 2553 is used by small businesses to elect S corporation status for federal tax purposes.
Eligibility To qualify, a corporation must meet specific criteria, including having no more than 100 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 S corporation election is to take effect.
State Requirements Some states have their own forms or requirements for S corporation status. For example, California requires Form 100S to be filed under California Revenue and Taxation Code Section 23802.
Impact on Taxes By electing S corporation status, income is passed through to shareholders, avoiding double taxation at the corporate level.

Key takeaways

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

  1. Eligibility Requirements: Ensure that your business qualifies as an S corporation. This typically includes being a domestic corporation with a limited number of shareholders.
  2. Filing Deadline: Submit the form within 75 days of your corporation’s formation or by the 15th day of the third month of the tax year you want S corporation status to take effect.
  3. Shareholder Consent: All shareholders must consent to the S corporation election. This is done by signing the form, so communicate with all shareholders before filing.
  4. Form Accuracy: Double-check all information on the form for accuracy. Mistakes can lead to delays or rejection of your election.
  5. Tax Implications: Understand the tax implications of electing S corporation status. This includes how income, deductions, and credits will be reported on your personal tax returns.
  6. Ongoing Compliance: After election, maintain compliance with IRS requirements for S corporations. This includes filing annual returns and adhering to eligibility rules.

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Example - 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)

Detailed Instructions for Writing IRS 2553

Once you have decided to elect S corporation status for your business, it's time to fill out the IRS Form 2553. Completing this form accurately is crucial to ensure your election is accepted and your business can benefit from the tax advantages associated with S corporations. Follow these steps carefully to navigate the process smoothly.

  1. Gather necessary information: Collect details about your corporation, including the legal name, address, and Employer Identification Number (EIN).
  2. Download the IRS Form 2553: Visit the IRS website to download the form. Ensure you have the latest version.
  3. Fill out Part I: Provide your corporation's name, address, and EIN in the designated fields. Make sure the information is accurate and matches your business records.
  4. Complete Part II: Indicate the date you want your S corporation status to begin. You can choose the current tax year or a future date.
  5. Answer eligibility questions: In Part II, you must confirm that your corporation meets the eligibility requirements for S corporation status. This includes having a limited number of shareholders and only one class of stock.
  6. Fill out Part III: List the names, addresses, and Social Security numbers of all shareholders. Each shareholder must consent to the S corporation election by signing the form.
  7. Review the form: Double-check all entries for accuracy. Mistakes can delay processing or lead to rejection of your election.
  8. Sign and date the form: Ensure that an authorized officer of the corporation signs and dates the form at the bottom of Part III.
  9. Submit the form: Mail the completed Form 2553 to the appropriate IRS address, which can be found in the instructions. Make sure to send it before the deadline to ensure your election is valid.

After submitting your form, keep a copy for your records. The IRS will process your election and notify you of its acceptance or any issues that need to be addressed. Being proactive now can save you time and complications later.

Documents used along the form

When filing the IRS Form 2553 to elect S Corporation status, several other forms and documents may be necessary to ensure compliance with tax regulations. Here are five commonly used forms that you might need to accompany your IRS 2553 submission:

  • Form 1120S: This is the U.S. Income Tax Return for an S Corporation. Once your S Corporation status is approved, you will need to file this form annually to report the income, deductions, and credits of the corporation.
  • Form 941: Employers use this form to report quarterly payroll taxes. If your S Corporation has employees, you will need to file Form 941 to report income taxes withheld and the employer’s share of Social Security and Medicare taxes.
  • Form 940: This is the Employer's Annual Federal Unemployment (FUTA) Tax Return. If your S Corporation has employees, you may need to file this form annually to report and pay unemployment taxes.
  • Form SS-4: This form is used to apply for an Employer Identification Number (EIN). An EIN is required for your S Corporation to conduct business and file taxes.
  • Alabama Bill of Sale Form: For a smooth transaction process, be sure to utilize our comprehensive Alabama bill of sale form resources for accurate documentation.
  • State-specific forms: Depending on your state, you may need to file additional forms to register your S Corporation or comply with state tax requirements. Check with your state’s tax authority for specific requirements.

Filing the IRS Form 2553 is a critical step for businesses seeking S Corporation status. Ensure you have all necessary forms ready to avoid delays and ensure compliance with federal and state regulations.