Form 2553 Instructions: How to Fill It Out, Line by Line
Ready to file your S corp election, but not sure what goes on each line?
Form 2553 is how your LLC or corporation tells the IRS it wants to be taxed as an S corporation. It's four pages, but most contractors only fill out the first two. Small mistakes on it can get the election rejected, so here's what goes where.
If you're still deciding whether an S corp makes sense, start with S Corp Election for Contractors: How to File Form 2553 by March 15.
Before You Start
Have these ready:
Your business's exact legal name and address, as they appear on your formation papers.
Your EIN. That's your Employer Identification Number, the business's tax ID number.
The date and state where your business was formed.
Each owner's name, address, Social Security number, and ownership share.
The date you want the S corp to start. For most contractors filing for next year, that's January 1.
Page 1: Election Information
Name and address. Use the exact legal name from your formation papers. If mail goes to someone else, like an owner, write "C/O" and that person's name after the business name.
Line A: EIN. Enter your business's EIN. Don't have one? You can apply online at IRS.gov/EIN, and it's issued right away.
Line B: Date incorporated. The date your corporation or LLC was formed.
Line C: State of incorporation. The state where it was formed.
Line D: Name or address change. Check a box only if the business changed its name or address after getting its EIN.
Line E: Effective date. The date you want S corp status to start. This line decides your deadline.
An existing business starting next year: enter January 1 of that year.
A brand-new business: enter the earliest of these dates: when it first had owners, first had assets, or first started doing business.
The form is due no more than 2 months and 15 days after the date on Line E. You can also file it any time during the year before.
Line F: Tax year. Almost every trades business checks box 1, calendar year. If you check a fiscal year instead, you'll also have to fill out Part II.
Line G: More than 100 shareholders. Skip it. This only applies to businesses with more than 100 owners.
Line H: Contact person. The name, title, and phone number of the person the IRS should call with questions. Usually that's you.
Line I: Late election. Only fill this in if you're filing late. Explain why the form wasn't filed on time and what you did once you found out. See Late S Corp Election: How to Fix a Missed Form 2553 Deadline.
Signature. An officer of the business signs and dates it, with their title. For a small LLC, that's usually the owner. An unsigned form isn't considered filed on time.
Page 2: Owner Information and Consent
Every owner gets a row.
Column J: Name and address of each owner. List everyone who owns part of the business on the day you file. If you're filing after the effective date, also list anyone who owned part of it at any point since that date.
Column K: Owner's consent. Each owner signs and dates here. This is where elections most often go wrong.
Married in California? California is a community property state. If your spouse has a community interest in the business, your spouse has to sign too, even if they aren't on the formation papers.
Joint owners each sign.
Column L: Ownership. For a corporation, the number of shares each owner holds. For an LLC, the percentage each owner holds. Also enter the date each owner acquired their share.
Column M: Social Security number for each owner.
Column N: Owner's tax year end. For individuals, that's almost always 12/31.
Pages 3 and 4: Usually Skip
Part II is only for businesses asking for a fiscal tax year instead of a calendar year.
Part III is only for certain trusts that own shares.
Part IV is only for an LLC making a late election that also missed the step of being treated as a corporation.
Where to File
Mail the original or fax it. Businesses in California (and about half the states) use:
Mail: Department of the Treasury, Internal Revenue Service Center, Ogden, UT 84201
Fax: 855-214-7520
If you fax it, keep the original with your business records. If you mail it, use a method that gives you proof of the mailing date. The IRS updates these addresses from time to time, so check the current list on IRS.gov before you send it.
After You File
You should get an answer within about 60 days. The acceptance letter is called a CP261, and it states the date your S corp status starts. Keep it with your permanent records. Your tax preparer will ask for it.
No answer after 2 months? Call the IRS at 1-800-829-4933.
Five Mistakes That Sink an Election
A missing spouse signature in a community property state like California.
No officer signature on page 1.
The wrong effective date on Line E, which can push you past the deadline.
A former owner left off, when you're filing after the effective date.
No follow-up. A form that never reached the IRS is the same as one never filed.
Key Takeaway: Most contractors only need pages 1 and 2. Get the effective date right, have every owner sign (including a spouse with a community interest), and keep proof that the IRS received it. Then hold on to your CP261 letter.
Want to know what an S corp could save you first? Run your numbers in the S Corp Tax Savings Calculator.
At Civita Tax Solutions, we help home service business owners save money on taxes with all-in-one accounting. We handle your bookkeeping, advisory, and tax filing. You focus on the business. We handle the finances.
Rather not fill it out yourself? Book a free consultation and we'll file Form 2553 for you.
