Understanding the S Corp Election Deadline

Key takeaways:

• The deadline for existing businesses to make an S corporation election is March 15, while new businesses have 75 days from their start date.
• Some companies qualify for late election relief if they miss the deadline.
• You must complete IRS Form 2553 to request S corp status.

When is the S corp election deadline?

The deadline varies depending on whether you’re just starting your company or you’ve been in business for a while and want to be taxed as a small business corporation.

Electing S corp status for a new business

Meet Fresh Sprout Landscaping LLC, a newly formed landscaping business started by Alex on February 1, 2025. Since Alex is interested in electing S corp status for tax benefits for the 2025 tax year, Fresh Sprout must file IRS Form 2553 with the IRS within 75 days of the business’s date of formation.

• Deadline for Fresh Sprout Landscaping LLC:
  February 1, 2025 (start date) + 75 days = April 17, 2025

By filing by April 17, Fresh Sprout can be treated as an S corporation for the 2025 tax year.

Electing S corp status for an existing company

Daisy’s Dog Grooming Inc. is a pet grooming business that’s been in operation for a few years. The owner, Daisy, wants to switch to S corp status in 2025 to save on self-employment taxes. 

Daisy runs her business on a calendar year, so the deadline to file Form 2553 is March 15, 2025, if she wants S corp tax treatment for the 2025 tax year.

• Deadline for Daisy’s Dog Grooming Inc.:
  March 15, 2025

In the following sections, we’ll break down the steps to file and what to expect from the S corporation election process.

Filing the S election on Form 2553

You must file Form 2553, Election by a Small Business Corporation, to officially elect S corporation status. This form notifies the IRS of your choice to be taxed as an S corporation.

Here are the steps you need to follow for a smooth filing process.

Step 1: Confirm eligibility

Before starting Form 2553, make sure your business meets the eligibility requirements to qualify for S corporation status. Here’s a quick eligibility checklist:

• Type of business. Your company must be a U.S.-based C corporation or limited liability company (LLC).
• Shareholders. You’re allowed up to 100 shareholders. All shareholders must be individuals, certain trusts, or estates (no partnerships, corporations, or non-resident aliens).
• Stock class. You can only have one class of stock.

If you meet these requirements, you can move on to Step 2.

Step 2: Gather information for Form 2553

Form 2553 requires some basic business information. Here’s what you need:

• Business name and address
• Employer Identification Number (EIN)
• Date and state of incorporation or formation
• Names, addresses, Social Security numbers, and percentage of ownership for each shareholder

Step 3: Complete and file Form 2553

Once you have all your information ready, fill out Form 2553. Here’s a quick guide to the main sections:

• Part I. Basic details about your business, including the effective date for the election (usually the first day of the tax year you want to apply the S corp status).
• Part II (if applicable). You only need to complete this section if you checked box 2 or box 4 on line F in Part I, meaning you operate on a fiscal year. Calendar-year taxpayers can skip this section.
• Part III (if applicable). You only need to complete this section to create a Qualified Subchapter S Trust—a trust that owns shares of an S corporation. Most small businesses can skip this section.
• Part IV (if applicable): This section applies if you missed the S corp election deadline and want to make a late election. You can skip this section if you’re filing Form 2553 within the deadline. We’ll cover late S corp elections in more detail later.

After completing Form 2553, double-check each entry for accuracy, as mistakes can delay or prevent the approval of your election. Then, submit the form to the IRS via mail or fax. The address or fax number depends on your state—you can find the right one in the IRS Instructions for Form 2553. Make sure you keep a copy of the form for your records.

Step 4: Wait for your confirmation letter

Once the IRS receives and processes Form 2553, they will issue a confirmation letter if your S corporation election is accepted. Keep this letter on file, as it verifies your business’s S corp status. 

Now, let’s get into what to do if you’ve missed the deadline.

Missed your S election due date? File a late S corp election

You're not out of luck if you’ve missed the deadline to file your S corporation election. The IRS offers a process for making a late S corp election, but you must meet specific requirements.

How to qualify for late election relief

The IRS allows late election relief if your business meets these requirements:

1. Eligibility for S corporation status. Your business must meet the same eligibility criteria for S corp status as it would with an on-time election, including restrictions on shareholders and stock classes.
2. You have reasonable cause for filing late. You’ll have to explain why you missed the original deadline. Acceptable reasons include misunderstanding the rules or bad advice from an accountant.
3. Operate like an S corporation. You need to demonstrate that you intended to make the S corp election from the beginning of the year. For example, you reported shareholder distributions and income allocations like an S corporation.
4. Meet the late filing timeframe. You have three years and 75 days from the date you initially wanted S corp status to take effect to make the late election request.

Missed the deadline? Don’t worry. We’ll cover how to request a late election next.

How to file Form 2553 for a late election

If your business meets these conditions, follow these steps to request a late S corp election:

1. Fill out Part I of Form 2553. Fill out this section as if you’re filing on time, including all necessary details about your corporation and shareholders. In Section I, explain the reason for the late filing. Be specific and provide relevant details demonstrating your intent to file on time. For example, mention this in the statement if the delay was due to miscommunication or incomplete advice from your accountant. Review Part IV and include the elections from this statement in your explanation in Section I of Part I.
2. Mark the form as a late election. In the upper margin of the first page of Form 2553, write “FILED PURSUANT TO REV. PROC 2013-30.” If you’re filing your tax return on Form 1120-S and submitting Form 2553 simultaneously, on the top margin of the first page of Form 1120-S, write “INCLUDES LATE ELECTION FILED PURSUANT TO REV. PROC. 2013-30.”
3. Mail or Fax to the IRS. Submit the completed Form 2553 to the IRS. Check the IRS Instructions for Form 2553 for the correct address or fax number based on your location. Be sure to keep a copy for your records.

The IRS will review your Form 2553 and decide whether you qualify for the late election. If approved, you’ll receive retroactive tax treatment. 

But before you make an S corporation election, make sure it’s the right move for your business. The next section will help you decide.

Is an S corporation right for my business?

While the benefits of making an S corporation election can be attractive, don’t forget about the trade-offs. Here’s a quick breakdown of the pros and cons to help you decide whether S corp status is right for you.

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For a deeper dive into these pros and cons, check out our other articles: What Is an S Corporation and Should You Form One and What is an S Corp Election? A Guide for Small Businesses.

How Bench can help with your S corp election

Changing your tax status to an S corporation can unlock valuable benefits, but it’s not the right move for every business. That’s why talking to a tax advisor is the best first step.

Bench’s small business tax services include everything from filing your business taxes to unlimited consultations with our in-house tax professionals. Whether you’re weighing the pros and cons of S corp status, preparing for an election, or simply need guidance on tax planning, our team is here to support you every step of the way.

Ready to get started? Get in touch with our team to discuss your options.

How to check S corp election status online

After filing Form 2553, you naturally want confirmation that the IRS has accepted your election. Here are answers to common questions about checking your S corp election status.

How to check the status of an S corp election

You can check the status of your S corp election by calling the IRS Business & Specialty Tax Line at 1-800-829-4933. Have your EIN ready for verification.

How do I know if my S corp election was accepted?

The IRS will mail you a confirmation letter, a CP261 Notice, if your election is accepted. This letter confirms your S corporation status. If you don’t receive a CP261 within 60 days, call the IRS at 1-800-829-4933.