How to Elect S Corporation Status

A corporation or eligible LLC can elect to be taxed as an S Corporation by filing Form 2553, Election by a Small Business Corporation, with the IRS. The form must be filed no later than two months and 15 days after the beginning of the tax year in which the election is to take effect, or at any point during the prior tax year. All current shareholders must sign the form to consent to the election, and the IRS will send a letter confirming the election once it is approved. If the deadline is missed, the IRS allows late election relief in many cases when the taxpayer can show reasonable cause for the delay. Once approved, the S Corporation election stays in place until it is voluntarily revoked or the corporation no longer meets the eligibility requirements.