Fill in a Valid IRS 2553 Template

The IRS Form 2553 is a critical document for small business owners who wish to elect S corporation status for tax purposes. This election can allow businesses to avoid double taxation, making it an attractive option for many. Understanding the nuances of this form is essential for maximizing tax benefits and ensuring compliance.

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For many small business owners looking to adopt an S corporation status, the IRS Form 2553 plays an essential role. This form allows eligible corporations to make a tax election that changes how they are taxed, providing potential advantages such as avoiding double taxation on income. Completing Form 2553 accurately is crucial and involves noting critical information like the entity's name, address, and employer identification number (EIN). Additionally, shareholders must consent to the S corporation election, which means their signatures will appear on the form to confirm agreement. The timing of filing is also vital; it should be submitted within a certain period to ensure that the election is effective for the desired tax year. Understanding the requirements and implications of this form can lead to smarter financial decisions and help streamline the tax process for those looking to maximize profitability while adhering to IRS regulations.

IRS 2553 Example

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)

Click for IRS 2553 File

File Breakdown

Fact Name	Description
Purpose	The IRS Form 2553 is used by small business corporations to elect S corporation status, allowing them to avoid double taxation.
Eligibility	To qualify for S corporation status, a corporation must have 100 or fewer shareholders, all of whom are eligible individuals or certain trusts.
Filing Deadline	The form must be filed within 75 days of the corporation's formation or by March 15 for existing corporations wishing to be treated as an S corporation for the current tax year.
State Requirements	Some states have additional requirements and forms for S corporation election. For instance, in California, corporations must file Form 100S and comply with California Revenue and Taxation Code Section 23802.

Guide to Using IRS 2553

Filling out the IRS Form 2553 is an important step for small businesses looking to elect S corporation status. Ensure you have all necessary information and paperwork ready before starting the process.

Begin by downloading the IRS Form 2553 from the IRS website or obtaining a physical copy.
At the top of the form, provide your corporation name, address, and employer identification number (EIN).
Enter the date of incorporation and the state in which the business was incorporated.
Specify the tax year you want to use for the S corporation election. This will typically be the calendar year, but other fiscal years may apply in certain contexts.
Indicate the number of shares of stock issued and the total number of shareholders.
List the names and addresses of all shareholders, including their Social Security numbers or EINs, and the percentage of stock owned by each.
If applicable, include information regarding all corporations that are affiliated or have any interest in the election.
Sign and date the form. Each shareholder must also sign and date to consent to the election.
Review the entire form to ensure accuracy and completeness, correcting any mistakes as necessary.
Submit the completed Form 2553 to the appropriate IRS office by the deadline, which is typically 75 days after the start of the tax year in which the election is to take effect.

After submission, you can expect to hear back from the IRS regarding your election status. Ensure to keep a copy of the submitted form for your records, as you may need it for future reference or in case of any inquiries.

Get Answers on IRS 2553

What is IRS Form 2553?

IRS Form 2553 is a document used by small businesses to elect to be treated as an S corporation for federal tax purposes. By making this election, the business can avoid double taxation, allowing profits and losses to be passed through to shareholders’ personal tax returns.

Who can file Form 2553?

Eligible corporations can file Form 2553, including:

Domestic corporations
Corporations with no more than 100 shareholders
Shareholders who are individuals, certain trusts, and estates
Entities that meet the qualifications of a small business corporation

However, certain corporations, such as specified financial institutions and foreign corporations, cannot elect S corporation status.

When should Form 2553 be filed?

To be effective for a given tax year, Form 2553 must generally be filed by:

The 15th day of the third month of the tax year (for new corporations).
Within two months and 15 days of the beginning of a tax year (for existing corporations).

Make sure to file timely to ensure the election is valid.

What happens if Form 2553 is filed late?

If Form 2553 is submitted after the deadline, the S corporation election may be denied. However, if you missed the deadline due to reasonable cause, you can request relief by following the IRS guidelines. Be prepared to provide a good reason for the delay.

Are there any special requirements to maintain S corporation status?

Yes, to keep S corporation status, a business must:

Limit the number of shareholders to 100
Ensure all shareholders are eligible
Issue only one class of stock

Failing to meet these requirements may result in automatic termination of S corporation status.

How does electing S corporation status affect taxation?

When a corporation elects S status, it becomes a pass-through entity. This means that the corporation itself does not pay federal income tax. Instead, the income is reported on shareholders’ personal tax returns. Shareholders pay taxes at their individual tax rates, which may result in savings on self-employment taxes and help with tax liability management.

Common mistakes

Filing the IRS Form 2553 can be an essential step for small business owners looking to elect S Corporation status. However, many make common mistakes that can lead to unnecessary delays or even rejection of the application. Understanding these pitfalls can help ensure a successful filing.

One major mistake is missing the deadline for submission. Form 2553 must be filed within a specific timeframe, generally within 75 days of forming the corporation or by the 15th day of the third month of the tax year. If this deadline is overlooked, the election may not take effect until the following tax year, potentially impacting tax liability. Planning ahead and marking essential dates on a calendar can mitigate this risk.

Another frequent error involves improper signatures. It's crucial that all shareholders sign the form. If someone forgets to provide their signature, it can invalidate the application. Each owner should review the document carefully before submission, ensuring all required signatures are included. Inadequate documentation can become a serious issue if overlooked.

Additionally, many people fail to provide accurate information about the corporation's structure. The IRS requires details regarding the number of shareholders, their consent to the election, and the fiscal year information. Entering incorrect data or failing to include necessary attachments might raise red flags during processing. Double-checking this information and confirming its accuracy can help avoid complications.

Finally, some individuals underestimate the importance of clear communication and record-keeping. Keeping copies of all submitted forms and related correspondence is vital. This way, should any questions arise from the IRS, it is easier to resolve matters quickly. Taking this proactive approach can simplify interactions with the agency and demonstrate professionalism.

Documents used along the form

The IRS Form 2553 is essential for a corporation or a limited liability company (LLC) to elect S Corporation status. This election allows the entity to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes. Several other forms and documents accompany this process, ensuring compliance with requirements and the steps necessary for proper registration and operation.

IRS Form 1120S: This is the U.S. Income Tax Return for an S Corporation. It reports the income, deductions, gains, and losses of an S corporation. This form captures the tax obligations of the S Corporation itself, though taxes are primarily passed to its shareholders.
Schedule K-1 (Form 1120S): This document is used to report each shareholder’s share of income, deductions, and credits from the S Corporation. Each shareholder receives a Schedule K-1 so they can accurately report income on their personal tax returns.
IRS Form 940: This is used to report the employer's annual Federal Unemployment Tax Act (FUTA) taxes. Once an S Corporation has employees, this form helps the entity meet its obligations to report unemployment taxes.
IRS Form 941: This quarterly tax form reports the amount of federal income tax, Social Security tax, and Medicare tax withheld from employees’ paychecks. S Corporations must file Form 941 to keep the IRS informed about payroll tax liabilities.
State S-Corporation Election Form: Depending on the state, S Corporations may need to file a separate form to elect S Corporation status at the state level. Each state has specific requirements and deadlines for this election.
Operating Agreement: While not a requirement for all LLCs, an operating agreement is crucial for outlining the internal governance of the LLC converted to an S Corporation. This document describes the roles and responsibilities of members and managers.

Completing these forms and maintaining all required documentation is critical for compliance with IRS regulations and to ensure the proper functioning of an S Corporation. By understanding and accurately submitting these additional documents, business owners can streamline their processes and avoid potential tax complications.

Similar forms

The IRS Form 2553 is integral for businesses electing to be taxed as an S corporation. However, there are other important documents with similar purposes and functions. Below is a list of eight such documents, each explained in terms of its relation to the Form 2553.

IRS Form 8832: This form is used by entities to elect their tax classification. Just like Form 2553, it helps businesses specify how they want to be treated for tax purposes, though Form 8832 can apply to various types of entities, beyond just S corporations.
IRS Form 1065: Partnerships file this form to report income, deductions, and other financial activity. Similar to Form 2553, it establishes a structure for the distribution of tax liabilities, but for multiple owners rather than a singular S corporation.
IRS Form 1120: This is the standard tax form used by C corporations. While Form 2553 applies to S corporations, both forms outline how different business types report income to the IRS and are subject to different tax rules.
IRS Form 941: Employers use this form to report income taxes, Social Security tax, and Medicare tax withheld from employees' paychecks. Like Form 2553, it is essential for compliance, ensuring correct tax obligations are met.
IRS Schedule C: Sole proprietors complete this form as part of their personal tax return to report income or loss from a business. While Form 2553 pertains to S corporations, both documents dictate how different entities report earnings to the IRS.
IRS Form 1065-B: This is a variation of the 1065 form specifically for electing large partnerships. Although it serves a unique purpose, it provides a similar function in determining how tax obligations are reported based on ownership structure.
IRS Form 5471: This form is required for certain U.S. citizens and residents who are officers, directors, or shareholders in certain foreign corporations. It parallels Form 2553 by focusing on ownership, even though it deals with international taxation.
IRS Form 8862: This form allows taxpayers to claim the Earned Income Credit (EIC) after it has been disallowed in previous years. It, too, is used to clarify eligibility and rectify tax matters, much like the purpose of S corporation election via Form 2553.

Dos and Don'ts

When filling out the IRS Form 2553, it’s important to follow certain guidelines to ensure your application is processed smoothly. Here’s a helpful list of dos and don’ts:

Do ensure that all information is accurate and complete.
Do file the form in a timely manner, keeping the deadline in mind.
Do include all required signatures and dates.
Do double-check your calculations, especially on lines related to income and assets.
Do provide a clear explanation if your business structure has changed.

Don't forget to check for any changes in IRS regulations that might affect the form.
Don't leave any sections blank; if a question doesn’t apply, indicate that appropriately.
Don't rely on just digital copies; always keep a physical copy of what you submit.
Don't underestimate the importance of clear handwriting if filling the form out by hand.
Don't hesitate to seek assistance if you find some sections confusing.

Following these tips can help ensure that your IRS Form 2553 is filled out correctly and submitted on time.

Misconceptions

The IRS Form 2553 is an important document for small businesses electing to be taxed as an S Corporation. However, there are several misconceptions about this form that can cause confusion. Here are eight common misconceptions and clarifications for each.

Misconception 1: The form can be filed anytime during the year.

This is not true. To be effective for the current tax year, the form must be filed within the first two months and 15 days of the start of the tax year. If filed late, you may have to wait until the following year.

Misconception 2: Only certain types of businesses can use Form 2553.

While not every business qualifies, many types of small businesses can elect S Corporation status. This includes corporations and limited liability companies (LLCs) that meet specific criteria.

Misconception 3: Filing Form 2553 guarantees S Corporation status.

Submitting the form does not guarantee approval. The IRS will review the application and may deny the election if the business does not meet the necessary requirements.

Misconception 4: You cannot revoke S Corporation status once it is elected.

This is incorrect. A business can revoke its S Corporation status, but it must follow the proper procedures. Certain limitations may apply, and the revocation can impact tax responsibilities.

Misconception 5: S Corporations avoid all taxes.

This is misleading. S Corporations still may face taxes, including certain built-in gains taxes and state-level taxes, depending on the location and specifics of the business.

Misconception 6: The IRS Form 2553 is only for new businesses.

This misconception overlooks established businesses. Any eligible corporation or eligible LLC can file the form to change its tax status to S Corporation at any time, as long as it meets the requirements.

Misconception 7: There is no penalty for not filing on time.

Actually, delays in filing can lead to paying higher taxes, as the business may miss the opportunity to elect S Corporation status for that tax year.

Misconception 8: All shareholders must be U.S. citizens.

While it's true that S Corporations have certain restrictions on investors, not all shareholders need to be U.S. citizens. However, there are limitations on who can be a shareholder, so it’s important to review these rules carefully.

Key takeaways

When dealing with the IRS 2553 form, there are several important points to keep in mind. This form enables small business owners to elect S Corporation status for tax purposes. Here are some essential takeaways:

Eligibility Requirements: Ensure that your business meets all the eligibility criteria. Only certain types of corporations can elect S Corporation status, and there are requirements regarding shareholders, stock classes, and residency.
Filing Deadlines: Be aware of the deadlines for filing the form. Generally, Form 2553 must be submitted by March 15 of the tax year you wish to elect S Corporation status. Late elections may require extra steps, so be prepared.
Written Consent: All shareholders must provide their consent to the S Corporation election. Gather the necessary signatures to avoid complications later on.
Form Accuracy: Fill out the form accurately. Errors or omissions can delay your S Corporation election and might require corrective actions, which can be time-consuming.
Ongoing Compliance: Understand that electing S Corporation status comes with ongoing responsibilities. Familiarize yourself with the tax implications and necessary filings to maintain this status.

By knowing these key points, you can navigate the IRS 2553 form with greater confidence, ensuring a smoother process for your business.