S Corp Election: Deadlines, Form 2553, and How to File
Electing S corp status is a tax choice, not a new company. You keep the entity you already have and file one form: IRS Form 2553. It asks the IRS to tax that entity under Subchapter S, so profits pass through to the owners instead of being taxed at the corporate level.
Timing is what trips people up. An S corp election is due within 2 months and 15 days of the start of the tax year you want it to cover, or any time during the tax year before that. For a calendar-year business already operating, that means March 15.
Below: who can elect, how to count the deadline, the five filing steps, missed windows, the state layer, and how to undo it. It commits you to payroll, so weigh it with the S corp tax calculator and LLC annual requirements first, or with S corp vs LLC if the structure itself is still open.
Key Takeaways
- The election changes how your business is taxed, not what kind of business it is.
- File Form 2553 within 2 months and 15 days of the tax year's start, or during the prior year.
- An officer signs the form and every shareholder consents, or it is not timely filed.
- A federal election does not automatically bind your state, and state rules keep changing.
- Undoing it is possible, but re-electing within five years generally needs IRS permission.
What an S Corp Election Is
You do not form an S corp. You form a business, then choose how it gets taxed. Two acts, two agencies: your state creates the entity, the IRS decides the tax treatment. If the entity does not exist yet, form the LLC first, because until it does there is nothing to elect on.
Once the IRS accepts, the business is an S corp federally, and income, losses, deductions and credits pass through to shareholders who report them on personal returns, as the IRS describes it. An LLC that elects is still an LLC: your operating agreement still governs and your state filings do not change, a combination covered in LLC with S corp election.
You will also see the paperwork called the "S-Corp election form," and the process called an S corporation election. Same thing. The IRS calls the form Form 2553.
Who Can Elect S Corp Status
Your business must be a domestic corporation or an entity eligible to be treated as one, with 100 shareholders or fewer, one class of stock, a permitted tax year, and no nonresident alien shareholders. Every shareholder has to consent. Banks using the reserve method, subchapter L insurers and DISCs are excluded outright.
Four of those tests are what actually disqualify small businesses:
- Shareholder type. Individuals, estates, certain trusts and 401(a) or 501(c)(3) exempt organizations only. A partnership or corporation as an owner ends it.
- Residency. One nonresident alien shareholder disqualifies the entity.
- One class of stock. Voting differences are fine, distribution and liquidation differences are not.
- Consent. Every shareholder signs, including silent and minority owners.
One correction, because several popular guides get it wrong: a December 31 year end is not required. A natural business year, an ownership tax year and a section 444 year are all permitted by the Form 2553 instructions. A non-calendar year is just harder to justify, and it triggers Part II of the form.
S Corp Election Deadline: 2 Months and 15 Days
File within 2 months and 15 days of the start of the tax year you want covered, or at any point during the tax year before it. A calendar-year business already operating is looking at March 15. A business whose first tax year began January 7 has until March 21.
That is not a fixed number of days. The two-month period starts on the day of the month your tax year begins and ends the day before the numerically corresponding day two calendar months later. Then add 15 days. The IRS's own examples show why a fixed count fails:
| First tax year begins | Two-month point | Window closes | Days elapsed |
|---|---|---|---|
| January 7 | March 6 | March 21 | 73 |
| November 8 | January 7 | January 22 | 75 |
Same rule, different day counts, because calendar months run different lengths. Guides promising new businesses "75 days" are quoting one example instead of the rule.
Knowing when to elect S corp status is easier if you use the prior-year option, which removes the counting question entirely. One note for this cycle: March 15, 2026 falls on a Sunday, so file the week before rather than testing whether a weekend buys a day.
How to File S Corp Election Paperwork in Five Steps
Get an EIN, complete Part I including the effective date on line E, collect every shareholder's consent in column K, complete Part II only if you chose a non-calendar tax year, then mail or fax the form to your service center. Kansas City takes faxes at 855-887-7734, Ogden at 855-214-7520.
- Get an EIN first. Item A asks for it, so a business without one stops at the first box. Start with EIN application if you need to.
- Complete Part I. Entity name exactly as your formation document has it, address, EIN, date and state of incorporation, and the effective date on line E. For a first tax year, line E is the earliest of the date you first had shareholders, first had assets, or began doing business.
- Collect consents in column K. Every shareholder signs there or on an attached statement, and an authorized officer signs the form itself. Both matter: an unsigned Form 2553 is not treated as timely filed, which quietly turns a correctly timed election into a late one.
- Complete Part II only if it applies, meaning you checked box 2 or box 4 in item F for a non-standard tax year.
- Send it. Mail the original or fax it. The s corp election instructions carry the current address and fax number for each service center, and are worth reading first, because several boxes reference each other.
After you file. Expect a determination in about 60 days, arriving as notice CP261. If nothing shows up 2 months after filing, or 5 months if you requested a fiscal year in box Q1, the IRS asks you to call 1-800-829-4933. Until the election takes effect, keep filing whatever return you already owed and do not file Form 1120-S for an earlier year. Afterward it becomes your annual return, covered in S corp filing.
If You Missed the Window
A late s corp election is not automatically a dead one. Relief runs through Revenue Procedure 2013-30, and the step most guides omit is that you write "FILED PURSUANT TO REV. PROC. 2013-30" across the top margin of page 1.
Qualifying takes four things: you intended the election as of the line E date, you failed to qualify only because the form was late, you had reasonable cause and acted diligently once you noticed, and you file within 3 years and 75 days of that date. That window is what makes a retroactive s corp election possible at all. Outside it you are down to a private letter ruling with a user fee, or the next tax year. Conditions sit on the IRS late election relief page.
The State Layer Most Guides Skip
A federal election does not automatically bind your state. Most states follow federal treatment without a separate filing, some require their own, and at least one has changed its answer recently enough that a lot of published advice is now wrong.
New York does not follow the federal election. Shareholders make a separate New York election on Form CT-6, and it must be approved before you file Form CT-3-S. There is a trap in the other direction too. If investment income tops 50 percent of federal gross income for the year, shareholders are deemed to have made the nys s corp election whether they filed CT-6 or not. Both rules sit on New York's franchise tax page for S corporations.
New Jersey went the other way. Under P.L. 2022, c. 133, the separate nj s corp election was eliminated for federal approval letters dated on and after December 22, 2022. A federal S corporation is now a New Jersey S corporation by default. The state wants three things instead: registration with the Division of Revenue and Enterprise Services as a corporation, a copy of the federal acceptance letter, and a Shareholder Jurisdictional Consent. That consent is the shareholders' acknowledgement that New Jersey may tax their S corporation income wherever they live. Opting out now takes an affirmative C corporation election signed by 100 percent of shareholders, per the Division of Taxation's procedural changes FAQ.
So "check with your state" is not an answer. Re-check it in any year you change entity type, add an out-of-state owner, or start operating somewhere new.
How to Revoke S Corp Election Status
Shareholders holding more than 50 percent of issued and outstanding shares, nonvoting stock included, have to consent. There is no form. You file a signed statement with the same IRS service center that took your Form 2553. Filed by the 15th day of the third month, it applies to that tax year.
The statement says the corporation is revoking its election, carries every consenting shareholder's signature, and includes the information required by Regulations section 1.1362-6(a)(3). You can name an effective date on or after the day you file. Name none and the timing rule decides: on or before the 15th day of the third month means the current tax year, after that means the next one. A revocation can be rescinded before it takes effect.
The expensive part follows. After a revocation or termination, the corporation generally needs IRS consent to elect again before the fifth tax year after the year the revocation took effect. That binds a single member LLC exactly as it binds a corporation. The mechanics are in the Form 1120-S instructions.
Ready to form the entity the election sits on top of? FormationHub handles the state filing, the registered agent and the paperwork behind it, so the only thing left is the tax election. Start your LLC with FormationHub.
Disclaimer: FormationHub is not a law firm or an accounting firm, and this article is general information, not legal or tax advice. Filing fees, processing times, and state requirements change. Confirm the current requirements with your state's filing office or the IRS before you file, and talk to a licensed attorney or CPA about your specific situation.
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