IRS Form 2553 – Are you a small business owner tired of double taxation on your C corporation profits? Or an LLC looking to optimize your tax strategy? IRS Form 2553—the Election by a Small Business Corporation—is the key document that lets eligible businesses switch to S corporation (S corp) tax status. This pass-through taxation can save thousands in taxes while keeping your corporate structure intact.
In this comprehensive guide, updated for 2026, you’ll learn exactly what Form 2553 is, who qualifies, the strict deadlines, a step-by-step filling guide, where to file, common pitfalls, and the real benefits (and drawbacks) of S corp election. We’ve pulled from the official IRS sources, including the latest Form 2553 (Rev. December 2017) and Instructions (Rev. December 2020), which remain current as of February 2026.
Download the official Form 2553 PDF here: https://www.irs.gov/pub/irs-pdf/f2553.pdf
What Is IRS Form 2553 and Why Does It Matter?
Form 2553 is the IRS form corporations and eligible entities (like LLCs taxed as corporations) use to elect S corporation status under Internal Revenue Code Section 1362(a). Once approved, your business passes income, losses, deductions, and credits directly to shareholders on their personal tax returns (via Schedule K-1).
This avoids the “double taxation” C corps face (corporate tax + shareholder dividends tax). S corps pay no federal income tax at the entity level in most cases—shareholders report everything on Form 1040.
Key fact: You can also use Form 2553 for late elections under Revenue Procedure 2013-30 if you missed the deadline but had a reasonable excuse.
What Is an S Corporation? Quick Overview?
An S corp is a special tax designation for small businesses. It combines the liability protection of a corporation with the tax simplicity of a partnership or sole proprietorship.
S corp vs. C corp vs. LLC:
| Feature | S Corp | C Corp | LLC (Default) |
|---|---|---|---|
| Taxation | Pass-through | Double taxation | Pass-through (unless elected otherwise) |
| Shareholder Limit | Max 100 | Unlimited | Unlimited |
| Stock Classes | One class only | Multiple allowed | N/A (membership interests) |
| Self-Employment Tax Savings | Yes (on distributions) | No | Depends on structure |
S corps shine for businesses with $100K–$2M in profits and 1–10 owners who want to minimize self-employment taxes.
Who Can File Form 2553? Strict Eligibility Rules?
Not every business qualifies. The IRS has eight tests in the Form 2553 instructions. You must meet all of them.
- Domestic Entity — Must be a U.S.-based corporation or an entity eligible to be taxed as one (e.g., domestic LLC).
- Shareholder Limit — No more than 100 shareholders. (Family members can count as one in many cases.)
- Eligible Shareholders Only — Individuals, U.S. citizens/resident aliens, estates, certain trusts (QSST/ESBT), and tax-exempt organizations. No partnerships, corporations, or nonresident aliens.
- One Class of Stock — All shares must have identical rights to distributions and liquidation (voting differences are OK).
- Not an Ineligible Corporation — Banks using reserve method, insurance companies, DISC, etc., are barred.
- Permitted Tax Year — Usually calendar year (Jan–Dec). Fiscal years require IRS approval or specific tests.
- All Shareholders Consent — Every shareholder (including former ones in some cases) must sign.
- Timely Filing — See deadlines below.
Pro tip: Single-member LLCs and multi-member LLCs can elect S corp status too—they just file Form 2553 (and sometimes Form 8832 first if needed).
2026 Deadlines for Filing Form 2553
Timing is everything. Miss it, and your S corp election is delayed a full year.
General Rule:
- File no later than 2 months and 15 days after the start of the tax year the election takes effect.
- Or anytime during the prior tax year.
For Calendar-Year Businesses (Most Common):
- To start in 2026: File by March 17, 2026 (March 15 falls on a Sunday, so extended).
- To start in 2027: File anytime in 2026.
For New Businesses:
- File within 75 days of the date the business begins (acquires assets, has owners, or starts operations).
Late Election Relief:
- You can request retroactive approval up to 3 years and 75 days after the intended start date.
- Attach a reasonable cause statement explaining the delay and your diligent efforts to fix it.
Step-by-Step: How to Fill Out IRS Form 2553
The form is only 4 pages but demands precision. Here’s the 2026 walkthrough (using the official PDF).
Part I: Election Information (Everyone Completes This)
- Name & Address: Legal name and mailing address.
- EIN: Employer Identification Number.
- Date Incorporated: When formed.
- State of Incorporation.
- Effective Date (Line E): The first day of the tax year you want S status (e.g., 01/01/2026).
- Tax Year (Line F): Check calendar year for most. Fiscal year? Complete Part II.
- Shareholder Details (Lines J & K): List every shareholder’s name, address, SSN, shares owned, and dates. All must sign and date the consent statement.
- Officer Signature: An authorized officer signs at the bottom.
Part II: Fiscal Tax Year (Only if not calendar year)
- Explain why you qualify for a fiscal year (natural business year, ownership year, or business purpose).
Part III: QSST Election (For certain trusts)
- Only if a trust holds stock.
Part IV: Late Election Representations (For late filers)
- Required statements for reasonable cause.
Pro Tips:
- Use black ink, type or print clearly.
- Attach extra sheets for more than 10 shareholders.
- For late filings: Write “FILED PURSUANT TO REV. PROC. 2013-30” at the top.
Where to File Form 2553 in 2026 (Mail or Fax)?
You cannot e-file Form 2553. Send the original (or fax) to the correct IRS center based on your principal business location.
If your business is in:
- Connecticut, Delaware, DC, 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 →
Mail: Internal Revenue Service, Kansas City, MO 64999
Fax: 855-887-7734 - All other states (Alabama through Wyoming, plus Alaska/Hawaii) →
Mail: Internal Revenue Service, Ogden, UT 84201
Fax: 855-214-7520
What happens next?
- IRS processes in 60 days (90 if fiscal year requested).
- You’ll receive CP261 (acceptance) or a rejection notice.
- Keep the acceptance letter forever.
Benefits of S Corp Election (and Potential Drawbacks)
Top Benefits:
- Tax Savings: Avoid corporate-level tax. Pay yourself a reasonable salary (subject to payroll taxes) and take the rest as distributions (no self-employment tax).
- Lower Audit Risk: Reasonable compensation rules are clear.
- Estate Planning: Easier to transfer shares.
Real-World Savings Example: A $300,000 profit business as C corp might owe ~$63,000 corporate tax + dividend tax. As S corp: ~$45,000 in payroll taxes on salary + personal taxes on the rest—often $20K+ savings.
Drawbacks:
- Strict rules (one stock class, shareholder limits).
- Reasonable salary requirement (IRS scrutinizes low salaries).
- State taxes may not conform (some states tax S corps differently).
Common Form 2553 Mistakes to Avoid
- Forgetting a shareholder’s signature.
- Wrong effective date.
- Missing reasonable cause statement for late filings.
- Using the wrong mailing address.
- Filing before getting an EIN.
Always double-check against the official instructions: IRS Form 2553 Instructions PDF.
Frequently Asked Questions (FAQs)
Can an LLC file Form 2553?
Yes—most LLCs elect S corp status this way.
Do I need a tax professional?
Highly recommended for late elections or complex shareholder structures.
What if the IRS rejects my Form 2553?
You can refile with corrections or request relief.
Does S corp election affect state taxes?
Check your state’s rules—some require a separate form.
How long does S corp status last?
Indefinitely, until revoked or terminated.
Final Thoughts: Is Form 2553 Right for Your Business in 2026?
Electing S corporation status via IRS Form 2553 is one of the smartest tax moves for growing small businesses—but only if you qualify and file correctly.
Don’t leave thousands on the table. Download the form today, review the instructions, and consult your CPA or tax advisor to ensure everything aligns with your 2026 goals.
Ready to file?
Grab the PDF: https://www.irs.gov/pub/irs-pdf/f2553.pdf
And always verify the latest at IRS.gov/Form2553.
This article is for informational purposes only and is not tax or legal advice. Tax laws change—consult a qualified professional.