Form 2553

What is Form 2553? 

Form 2553 is a document from the Internal Revenue Service (IRS) and is also known as “Election by a Small Business Corporation.” If you submit this form to the IRS, you are essentially telling the IRS that you want your business entity to become an S corporation for tax purposes. 

An S corporation is a kind of business structure that avoids double taxation. This means that the income and losses will be passed through to the shareholders and not have to pay federal corporate taxes. 

Once the IRS receives Form 2553, the agency will conduct a review and inform you of their decision to confirm or reject the election of S corporation status through a letter. 

When can a corporation complete and file Form 2553 to the IRS? 

Corporations should file Form 2553 not more than two months and 15 days after the beginning of the tax year the election is to take effect. Another option is at any time during the tax year before the year that it is to take effect. 

Before a corporation can submit a Form 2553, they must meet certain criteria to be eligible for S corporation status:

• The corporation must be a domestic corporation.
• The qualifying number of shareholders must not be more than 100.
• The corporation must only have one class of stock. 
• It must not be an ineligible corporation. 

What kind of information do corporations need to furnish on Form 2553? 

These are the pieces of information that corporations must have to fill out Form 2553:

• Name and address of the corporation
• Employer Identification Number (EIN)
• The effective date of election
• Name, address, and social security number of each shareholder required to consent to the election
• Signature of each shareholder
• Number of shares of stock owned by each shareholder and the dates that the stock was acquired
• Month and day that each shareholder’s tax year ends

Form 2553 must be signed and dated by the president, vice president, treasurer, assistant treasurer, chief accounting officer, or any other corporate officer (such as tax officer) authorized to sign.