Form 2553: S Election Deadline and Late Election Relief
The two-month-and-fifteen-day rule, the relief procedure for late elections, and what the form requires
Reviewed by the Fairlight Accounting cross-border tax team — U.S. & Canadian Tax Desks
Form 2553 is the election a corporation or an LLC files to be taxed as an S corporation. To take effect for a tax year, it must be filed within two months and fifteen days after the year starts (March 15 for a calendar year) or during the preceding year. A late election can usually be rescued under relief procedures.
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What does the election do?
It converts the entity's tax status from a C corporation (or, for an LLC, from a partnership or disregarded entity) to a pass-through: income, losses, deductions, and credits flow to the shareholders' returns, the entity generally pays no federal income tax, and the owners pay themselves a reasonable salary through payroll with the remaining profit distributed free of payroll tax — the arithmetic every entity guide on this site runs. The election is made once and stays in effect until revoked or terminated; it does not need to be renewed.
Who is eligible?
| Requirement | Detail |
|---|---|
| Domestic corporation or eligible entity | A U.S. corporation, or an LLC (which may file Form 2553 alone — a separate Form 8832 is not required) |
| No more than 100 shareholders | All members of a family are automatically counted as one shareholder |
| Eligible shareholders only | Individuals who are U.S. citizens or residents, certain trusts, estates, and tax-exempt organizations; no partnerships, corporations, or nonresident aliens as shareholders |
| One class of stock | Differences in voting rights are allowed; differences in distribution or liquidation rights are not |
| Not an ineligible corporation | Certain financial institutions, insurance companies, and others are excluded |
| Permitted tax year | Calendar year, or a fiscal year with a business purpose or a section 444 election |
All shareholders on the date of the election (and, if the election is retroactive to the start of the year, anyone who held stock during the year) must consent by signing the form. A missing signature is the most common defect.
When is it due?
For an election effective at the start of a tax year: no later than two months and fifteen days after the year begins — March 15 for a calendar year, counting two months to the end of February plus fifteen days. Or: any time during the prior tax year for the following year. A new entity's first tax year begins when it first has shareholders, acquires assets, or begins business, whichever is earliest — so a corporation formed on June 10 has until August 24 to elect for its first year. A Form 2553 filed after the deadline takes effect the following year unless relief is granted. The form is filed by mail or fax to the IRS service center for the entity's state; it is not filed with a return.
What if it is late?
The IRS's simplified relief procedure (Revenue Procedure 2013-30, still current in 2026) grants relief for a late election when: the entity intended to be an S corporation as of the intended effective date; the only reason it failed was the late filing; it has reasonable cause for the lateness and acted diligently once the failure was discovered; the entity and all shareholders have filed returns consistent with S status for every year since the intended effective date (or no returns were yet due); and the request is filed within three years and seventy-five days of the intended effective date. The request is Form 2553 itself, with "FILED PURSUANT TO REV. PROC. 2013-30" written at the top and a statement of reasonable cause and the shareholders' representations attached. Common reasonable causes: reliance on a professional who failed to file, a misunderstanding of the deadline, an entity that operated and filed as an S corporation from the start without realizing the form was never sent. Outside the three-year window, an LLC needs a private letter ruling — expensive and slow; a corporation can still use the simplified procedure if it and every shareholder reported as an S corporation for every year, at least six months have passed since the first-year return, and the IRS raised no issue within six months of that return.
How do I confirm the election was accepted?
The IRS sends an acceptance letter (CP261) generally within sixty days. If none arrives, call the IRS Business & Specialty Tax Line to confirm; keep the fax confirmation or certified-mail receipt as proof of timely filing. Filing Form 1120-S without a confirmed election invites a rejection notice; the fix is the relief procedure above, attached to the return (the IRS also accepts a late Form 2553 attached to the first Form 1120-S under the same revenue procedure).
How does an LLC elect?
An LLC files Form 2553 directly. The election is deemed to include a Form 8832 election to be classified as a corporation, effective the same date — so a single-member LLC goes from disregarded entity to S corporation, and a multi-member LLC from partnership to S corporation, in one step. The LLC keeps its state-law form; only its federal (and usually state) tax treatment changes. The operating agreement should be reviewed for provisions — special allocations, preferred returns — that would violate the single-class-of-stock rule.
Worked example
A plumbing LLC formed in 2025 has operated as an S corporation in practice since January 1, 2026 — the owner took a salary through payroll, the accountant prepared a 2026 Form 1120-S — but Form 2553 was never filed; the owner discovers this in February 2027 when the IRS rejects the 1120-S. Relief: the intended effective date was January 1, 2026; the deadline was March 15, 2026; the failure was solely the unfiled form; the owner relied on the prior bookkeeper's assurance it was sent (reasonable cause); the entity and owner filed consistently with S status; and it is well within three years and seventy-five days. The owner files Form 2553 marked for Revenue Procedure 2013-30 with the reasonable-cause statement and shareholder representation, attached to the resubmitted 1120-S. The election is granted effective January 1, 2026. Had the owner instead formed the LLC in 2022 and never filed, the three-year window would have closed and a private letter ruling would be the only route.
Frequently asked questions
When is Form 2553 due?
Within two months and fifteen days after the start of the tax year the election is to take effect (March 15 for a calendar year), or any time during the preceding tax year.
Can I file Form 2553 late?
Yes, under the IRS's late election relief procedure, if the entity intended to be an S corporation, has reasonable cause, has filed consistently with S status, and requests relief within three years and seventy-five days of the intended effective date.
Can an LLC file Form 2553?
Yes. An LLC files Form 2553 directly; it is deemed to include the corporate classification election, so no separate Form 8832 is needed.
How do I know the election was accepted?
The IRS sends acceptance letter CP261, usually within sixty days. If it does not arrive, confirm by phone and keep your proof of filing.
Official sources
The Instructions for Form 2553 state: “A late election to be an S corporation generally is effective for the tax year following the tax year beginning on the date entered on line E of Form 2553. However, relief for a late election may be available if the corporation can show that the failure to file on time was due to reasonable cause.” — Internal Revenue Service, Instructions for Form 2553, Election by a Small Business Corporation, https://www.irs.gov/instructions/i2553
The IRS states: “Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”).” — Internal Revenue Service, Limited liability company (LLC), https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
Next step
Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk handles S election timing and Form 2553 preparation, late election relief requests, operating agreement review for the single-class-of-stock rule, and first-year S corporation payroll setup. See pricing or book a call.
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