What Is Form 2553?
Form 2553: Form 2553 is filed by business entities to elect being taxed as an S Corp by the IRS. Being taxed as an S Corp is a popular choice for many small business owners, as it can potentially reduce their federal tax liability in certain circumstances.
IRS Definition: A corporation or other entity eligible to be treated as a corporation files this form to make an election under section 1362(a) to be an S corporation.
What Is an S Corp?
An S Corporation is an IRS tax classification where a business owner disburses an LLC's profit to owner-employees in the form of salary and distributions. The IRS then applies FICA and income taxes to only the salary. Distributions are subject to only income tax.
This can potentially reduce the tax burden for certain business owners. For more information, read our What is an S Corporation? guide.
Who Can File Form 2553?
Business entities that are eligible to elect S Corp tax status — certain corporations and LLCs — can file Form 2553. To qualify to be taxed as an S Corp, a corporation or LLC must:
- Have 100 shareholders or less
- Issue only one class of stock
- Have owners that are US citizens or permanent resident aliens
- Be owned by private individuals and not business entities such as LLCs, corporations, or trusts
How to File Form 2553
The IRS provides detailed instructions for how to file Form 2553. Continue reading below for an overview of the process.
When to File Form 2553
The Form 2553 deadline is no later than two months and fifteen days after the start of the tax year in which the S corporation will take effect. They can also file Form 2553 any time before the tax year in which the S corporation will take effect.
Form 2553 late filing may be permitted if the following conditions are met:
- The company intended to be classified as an S corp by the effective date listed on the form
- The only reason the corporation doesn’t qualify as an S Corp is because Form 2553 wasn’t filed on time
- The corporation has a reasonable explanation for missing the filing deadline and has “acted diligently” to address the issue
- The company must be able to provide statements from all shareholders of the company from the effective date listed on Form 2553 until the date on which the form was filed that says they have reported their income on all returns as if the company had elected S Corp status.
Where to File Form 2553
Form 2553 can be filed by fax or mail. It cannot be filed by email. The fax number or address depends on the state where the business is located:
Connecticut, Delaware, District of Columbia, 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: Department of the Treasury
Kansas City, MO 64999
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming
Mail: Department of the Treasury
Ogden, UT 84201
Form 2553 FAQ
What is Form 2553 used for?
Form 2553 is used by certain corporations and LLCs to elect S Corp tax status with the IRS.
Do I have to file Form 2553 every year?
No. Form 2553 only needs to be filed once with the IRS.
Can Form 2553 be filed electronically?
No, Form 2553 must be filed by fax or mail.
Who can file Form 2553?
Corporations and LLCs can file Form 2553 as long as they meet the following requirements: have 100 shareholders or less, issue only one class of stock, have owners that are US citizens or permanent resident aliens, and are owned by private individuals and not business entities (such as LLCs, corporations, or trusts).
How do I convert to an S Corp?
LLCs and corporations can elect S Corp tax status by filing Form 2553 with the IRS.
Can I change from LLC to S Corp?
An LLC can elect to be taxed as an S Corp if it meets certain conditions. However, it will still be an LLC.