Lesson 5 of 11
Form 2553 and election timing
The election is made by filing Form 2553 with the IRS, signed by every shareholder.
What the form requires
- Entity name, EIN and date of incorporation or formation
- The tax year the election should take effect
- Details and signed consent of every shareholder
- The selected tax year, normally the calendar year
Timing
To apply to a given tax year, the election generally must be filed no later than two months and 15 days after the beginning of that year, or at any time during the preceding year. A new company usually files shortly after formation.
The IRS confirms acceptance in writing. Keep that acceptance letter with your permanent records.
Late elections
The IRS has relief procedures for late elections where there was reasonable cause and the company has otherwise behaved as an S corporation. Relief is not automatic and needs a properly supported request.
You need an EIN before filing Form 2553. Get the entity formed and the EIN issued first.
Official sources
Not sure whether the election fits?
The numbers depend on your profit, your role in the business and your state. Gullia Filing's tax team reviews your position, prepares Form 2553 where it makes sense, and sets up payroll so the election holds up.