What Is Form 2553?

Form 2553, officially titled “Election by a Small Business Corporation,” is the IRS document used by eligible domestic corporations to elect S‑corporation status for federal tax purposes. By filing this form, a corporation can pass its income, losses, deductions, and credits through to shareholders, avoiding the double taxation that applies to C‑corporations.

The election is permanent unless the corporation revokes it or the IRS terminates it for non‑compliance. Understanding the form’s purpose is the first step toward a smooth filing experience.

Who Needs to File Form 2553?

Not every corporation qualifies for S‑status. The IRS sets clear eligibility rules:

• Domestic corporation (or a limited liability company that has elected to be treated as a corporation).
• Must have no more than 100 shareholders.
• All shareholders must be U.S. citizens or resident aliens.
• Only one class of stock is allowed.

If your business meets these criteria and you want the tax benefits of an S‑corporation, you’ll need to submit Form 2553 using the instructions provided below.

Key Deadlines & Eligibility Overview

Timing is critical when filing Form 2553. Missing the deadline can result in the election being delayed until the next tax year.

Always verify the specific calendar year you’re targeting and confirm that the filing window aligns with the dates shown above.

Step‑by‑Step Form 2553 Instructions

Below is a practical walkthrough of each part of Form 2553. Follow the sequence to avoid common errors.

Part I – Election Information

• Enter the corporation’s legal name, EIN, and address.
• Indicate the tax year beginning date (usually January 1).
• Select the appropriate election type (new election, late election, or revocation).

Part II – Shareholder Consent

• List every shareholder’s name, Social Security Number (or EIN for entities), and ownership percentage.
• Each shareholder must sign and date the consent statement. Their signatures confirm agreement with the S‑corporation election.
• If a shareholder cannot sign, a power of attorney is acceptable, but it must be attached.

Part III – Corporate Tax Year and Additional Information

• Specify the corporation’s tax year (calendar or fiscal).
• Provide any required attachments, such as a statement of eligibility or a relief request for late filing.
• If the corporation has elected fiscal year treatment, include Form 1128 (Change of Accounting Period) reference.

After completing all parts, double‑check the form for completeness, attach supporting documents, and prepare to submit.

Common Mistakes and How to Avoid Them

Even seasoned accountants occasionally slip up on Form 2553. Recognizing frequent pitfalls can save you time and money.

• Incorrect shareholder percentages: Percentages must add up to 100 %. Use a calculator to verify before signing.
• Missing signatures: Every shareholder’s signature is mandatory. An unsigned consent invalidates the election.
• Wrong filing address: Fax the form to the correct IRS fax number for your state; mailing to the wrong processing center leads to delays.
• Late filing without a relief statement: If you miss the deadline, include a clear explanation of “reasonable cause” to request late‑election relief.

Keeping a checklist of these items during preparation helps ensure a clean submission.

How to Fax Form 2553 (Including Where to Send It)

Many businesses prefer faxing because it provides a quick, verifiable transmission record. To fax Form 2553:

1. Complete the form according to the step‑by‑step instructions above.
2. Gather all required shareholder signatures and supporting documents.
3. Print a clear, legible copy of each page.
4. Dial the IRS fax number for Form 2553 based on the state where the corporation is organized (e.g., 855‑215‑2784 for most states).
5. Send the fax and retain the transmission confirmation page as proof of filing.

For a quick reference to the correct fax number and additional filing tips, visit where to fax form 2553.

Electronic Filing Options and Third‑Party Services

The IRS now permits electronic filing of Form 2553 through authorized e‑file providers. This method eliminates the need for paper and fax, offering instant receipt acknowledgment.

When evaluating a third‑party service, consider the following criteria:

• Compliance with IRS e‑file standards.
• Security measures for protecting sensitive shareholder information.
• Pricing structure (often a flat fee per filing).
• Customer support availability for post‑submission questions.

Electronic filing is especially useful for corporations with multiple shareholders spread across different states, as it streamlines signature collection via secure online portals.

Costs, Supporting Documents, and Record‑Keeping

Filing Form 2553 itself carries no fee when submitted directly to the IRS. However, you may incur costs for:

• Professional preparation services (accountant or tax attorney).
• Third‑party e‑file platforms (typically $50‑$150 per filing).
• Certified copies or notarizations if required by your state.

Maintain a permanent copy of the signed form, all shareholder consents, and any correspondence with the IRS. Store these records with your corporate tax documents for at least seven years, as the IRS may request them during an audit.

Frequently Asked Questions

Can I change my S‑corporation election after it’s been approved?

Yes. You can revoke the election by filing Form 1120‑S, Schedule K‑1, and a statement of revocation. The change generally takes effect at the start of the next tax year.

What if I have more than 100 shareholders?

The corporation becomes ineligible for S‑status. You would need to consider alternative structures, such as a C‑corporation or a limited liability company taxed as a partnership.

Is there a penalty for filing a late Form 2553?

There is no monetary penalty, but a late filing may delay the effective date of the election. Requesting relief for reasonable cause can restore the intended tax year.