How to File an S-Corp Election with the IRS

Filing an S-Corporation Election with the IRS is not the most tedious filing you will need to complete for your new business, but there are certainly some important details that you should be aware of. But not to worry, Bend Law Group is hereto walk you through the steps!

Filing Deadlines

Form 2553 must generally be filed:

• No more than 2 months and 15 days     after the beginning of the tax year the election is to take effect, or

• At any time during the tax year     preceding the tax year it is to take effect.

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For example, if your corporation's tax year begins on January 1, the deadline to file Form 2553 for that year would be March 15. If you miss this deadline, the S-Corp election will not be effective until the following tax year, so don’t procrastinate!

Drafting IRS Form 2553

First, you will need to fill out Form 2553 with accurate information, including the corporation's name, Employer Identification Number (EIN), and the desired effective date of the S-Corp election.

You will also need to ensure that all shareholders consent to the S-Corp election by signing the appropriate section of the form on page 2. If you live in a community property state like California, spouses will also be considered as shareholders and should be listed as well.

Submitting the Form

There are two ways to submit the filing, either by mail or fax (we personally love DropboxFax for this purpose!).

Mailing: Sign and send the completed form to the IRS address designated for your state.For California, the address is:

           Department of the Treasury

           Internal Revenue Service Center

           Ogden, UT 84201

Faxing: Alternatively, you can fax the form to 855-214-7520. ​

Now What?

Upon receipt, the IRS will process your Form 2553 and notify you of its acceptance or rejection, typically within 60 days. If accepted, your corporation will be recognized as an S-Corp for the specified tax year. It's crucial to retain theIRS acknowledgment letter for your records, as it isn’t easy to acquire another one.

Late Election Relief

If you miss the filing deadline, you may still qualify for S-Corp status by demonstrating "reasonable cause" for the delay. To request late election relief, write "FILED PURSUANT TO REV. PROC. 2013-30" in bright red text at the top of Form 2553 and attach a statement explaining the reason for the delay. The IRS will review your case and determine whether to grant relief or not.

If this all sounds like a bit more than you’d like to handle on your own, then do not hesitate to reach out to Bend Law Group at info@bendlawgroup.com.

Disclaimer:This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal or tax advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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