How to Elect S-Corp Status: A Step-by-Step Guide to Filing Form 2553

Suppose you’re running a small business as an LLC or a corporation. In that case, you’ve probably heard that electing S-Corporation (S-Corp) status can save you money on self-employment taxes. But how do you actually become an S-Corp in the eyes of the IRS? The answer lies in IRS Form 2553 — the key document formally electing S-Corp tax treatment for your business. 

In this guide, we’ll walk you through what S-Corp status means, who qualifies, and most importantly, how to complete and file Form 2553 step by step. 

What Is S-Corp Status? 

An S-Corporation is not a business entity (like an LLC or C-Corp). Instead, it’s a tax classification that allows your business to pass income, losses, deductions, and credits through to shareholders, avoiding double taxation. More importantly, S-Corp owners can reduce their self-employment tax liability by splitting income into a “reasonable salary” (subject to payroll taxes) and “distributions” (which are not). 

Who Can Elect S-Corp Status? 

Not every business qualifies for S-Corp election. Here are the basic requirements: 

• Must be a domestic corporation or LLC 

• Have only allowable shareholders (individuals, certain trusts, and estates — not partnerships or corporations) 

• No more than 100 shareholders 

• Have only one class of stock 

• Must file Form 2553 on time 

When to File Form 2553 

Form 2553 can be filed within the following due dates: 

• New businesses must file within 75 days of formation. 

• To apply for the current tax year, existing businesses must file by March 15. 

If you miss these deadlines, your election may apply to the following year unless you provide a reasonable cause for late filing. 

How to File Form 2553: Step-by-Step Guidance 

I: Election Information 

This section gathers your business’s key info. 

1. Name and Address: Use your legal business name and official mailing address. 
2. Employer Identification Number (EIN): You must have an EIN before filing. Apply online at irs.gov if you don’t have one. 
3. Incorporation Date and State: The date you formed your business and the state where it’s registered. 
4. Tax Year Election: Most businesses use the calendar year, but you must attach an explanation if you choose a fiscal year. 
5. Effective Date: Enter the date you want S-Corp status to begin. Usually, it is January 1 of the year you’re applying for. 
6. Contact Person: Include the name and phone number of someone the IRS can call for clarification. 
7. Shareholder Consent: Each shareholder must sign and consent to the S-Corp election. 

II: Selection of Fiscal Year (Optional) 

Most small businesses use the calendar year and can skip this section. If you want to elect a fiscal year (e.g., July to June), explain your “business purpose” and file additional paperwork in Form 8716. 

III: Late Election Relief (If Applicable) 

If you’re filing late, this is your chance to plead your case. You’ll need to: 

• Check the box requesting relief 

• Provide a reasonable explanation for why the form wasn’t filed on time 

• State that you intend to be treated as an S-Corp since the intended effective date 

The IRS is generally lenient if you’re making a good-faith effort. 

How to Submit Form 2553 

As of now, Form 2553 cannot be e-filed — it must be submitted by mail or fax to the appropriate IRS office based on your state. 

You can find the most up-to-date addresses and fax numbers in the IRS instructions here. 

Make sure to: 

• Keep a copy for your records 

• Follow up with the IRS if you don’t receive confirmation in 60 days 

Checklist Before You File 

• You have an LLC or corporation 

• You have an EIN 

• Your business qualifies for S-Corp status 

• You’re filing within the IRS deadline 

• All shareholders agree and will sign 

• You’ve chosen your effective date 

• You’re submitting to the right IRS office 

Read Also: Why Outsourcing S Corp Tax Preparation Services is a Smart Move

Final Thoughts 

Filing Form 2553 to elect S-Corp status can be a game-changer for small businesses—but only when done correctly and strategically. The process may seem straightforward, but a small mistake or missed deadline can delay your tax benefits by a year. That’s why it’s essential to understand the “how” and the “why” behind your decision. 

If you’re unsure whether an S-Corp election is right for your business or want to ensure the paperwork is done right the first time, it’s smart to get professional guidance. 

How can KMK help? 

At KMK, we don’t just explain IRS forms—we also help you make smarter business decisions. Whether forming an LLC or electing S-Corp status, our team guides you through every step. From filing Form 2553 to setting up payroll and staying compliant, we handle the details so you can focus on growing your business. 

Here’s how we support you: 

• Customized advice on whether S-Corp status is right for your situation 

• End-to-end filing of Form 2553 with IRS-compliant documentation 

• Ongoing compliance support (payroll, distributions, bookkeeping) 

• Strategic tax planning to help you maximize your savings 

Contact us now at info@kmkventures.com for a free consultation.