How to fill out Form 2553

Who needs this form

File Form 2553 when a domestic corporation, or a domestic LLC or other eligible entity, wants to be taxed as an S corporation. An eligible entity that files a valid Form 2553 is treated as having elected corporation status too, so it does not also need Form 8832.

The election works only if every test in the instructions is met:

• The entity is domestic (formed in the United States).
• It has no more than 100 shareholders. Members of a family can count as one.
• Its shareholders are only individuals, estates, certain trusts and certain exempt organizations. A nonresident alien cannot be a shareholder, except as a potential current beneficiary of an electing small business trust.
• It has one class of stock. Differences in voting rights alone do not count.
• It is not an ineligible corporation, such as a bank that uses the reserve method for bad debts, an insurance company taxed under subchapter L, or a current or former DISC.
• It has or adopts an acceptable tax year, and every shareholder consents.

An entity without an EIN applies for one first on Form SS-4. A foreign owner can't hold S corporation stock, so a non-US founder usually looks at a regular corporation or LLC instead: see how to get an EIN as a non-resident.

What to have ready

• The entity's exact legal name, address and EIN, the date it was incorporated or formed and its state.
• The date the election should take effect, and the tax year you want (most use the calendar year).
• The name, title and phone number of an officer the IRS can call.
• For every shareholder: name and address, shares owned or percentage of ownership, the date or dates the stock was acquired, SSN or EIN, and the month and day their tax year ends.
• Each shareholder's signature on the consent. In a community property state, both spouses sign.
• For a late election, a short explanation of why it is late and what you did to fix it.

Step by step

1. Enter the name, address and EIN Part I

   Write the entity's true legal name as on its formation papers, its address and its EIN in Item A. If you applied for an EIN and it hasn't come yet, write "Applied For" and the date you applied. Give the date of incorporation or formation in Item B and the state in Item C. Check Item D if the name or address changed after you got the EIN.

2. Choose the effective date Item E

   Enter the first day of the tax year the election should start. For an entity in its first year, that is the earliest of the dates it first had shareholders, first had assets or began doing business. This is often a date other than January 1.

3. Pick the tax year Item F

   Most entities check the calendar year. If you check a fiscal year or a 52-53-week year not tied to December, you must also complete Part II.

4. Answer the family and contact items Item G and Item H

   Check Item G only if more than 100 shareholders are listed and treating family members as one brings the count to 100 or fewer. In Item H, name the officer or legal representative the IRS may call, with their title and phone number.

5. Explain a late election Item I

   Leave it blank if you file on time. If you are late, give the reason, describe what you did to correct it once you found out, and follow the late election rules below.

6. Have an officer sign page 1

   An officer authorized to sign for the entity signs, writes their title and dates the form. The instructions say an unsigned form won't be considered timely filed.

7. List every shareholder and get each consent Column J to Column N

   List each shareholder in Column J. For a late election, include former shareholders who owned stock at any time during the period that needs their consent. Each one signs and dates the consent statement in Column K. Fill in shares or percentage and dates acquired in Column L, the SSN or EIN in Column M and the tax year end in Column N. Use more copies of page 2 if you run out of rows.

8. Complete the other parts only if they apply Part II to Part IV

   Part II is for a fiscal year. Box Q1 in it requests a ruling and needs a business purpose statement and a user fee. Part III is for a qualified subchapter S trust election. Part IV is for a late election by an entity that also needs relief for a late classification election.

Common mistakes

Where it goes

The form goes to the IRS by mail or fax, to the center for the state of the entity's principal business, office or agency. The IRS notes these details can change, so check Where to file Form 2553 before sending.

• 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, Kansas City, MO 64999, or fax 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, Ogden, UT 84201, or fax 855-214-7520.

The IRS generally answers within about 60 days. If you checked box Q1, allow about 90 more days. If you hear nothing after 2 months (5 months with box Q1), call 800-829-4933.

Late elections. Relief under Rev. Proc. 2013-30 is available if you file within 3 years and 75 days of the effective date and had reasonable cause. Explain it in Item I, add the heading above and include the shareholder statements the instructions describe. Otherwise, relief needs a private letter ruling and a user fee.