Choosing the right business structure is one of the most important early decisions for any founder. For many, opting to be taxed as an S-Corporation can unlock serious tax savings—without giving up liability protection. This is accomplished by filing Form 2553 with the IRS. Understanding this form helps ensure your filing is timely, accurate, and beneficial.

This guide walks founders, operators, and business owners through every key step to successfully elect S-Corp status using Form 2553. From eligibility criteria to submission requirements and post-election compliance, here’s what you need to know.

What Is Form 2553 and Why It Matters for Your Business

Form 2553, officially titled “Election by a Small Business Corporation,” is the IRS document that eligible entities file to request S-Corporation tax treatment. Once approved, your business profits and losses will pass through directly to shareholders’ personal tax returns—avoiding many of the double taxation issues with C-Corporations.

Key Benefits of Electing S-Corp Status

• Avoids corporate-level income tax

• Pass-through taxation reduces double taxation risk

• Minimizes self-employment taxes via salary vs distribution split

• Retains limited liability protection for shareholders1

But eligibility and timing are critical. You’ll need to ensure your business qualifies and submit the form correctly to benefit fully.

Learn more about common legal structures and their tax implications in our guide to legal structures for businesses.

Step 1: Confirm Eligibility to File Form 2553

Before filing, confirm your business meets IRS requirements for S-Corp election:

Missing any of these criteria may result in automatic rejection by the IRS. Make sure your business structure supports a valid election or start your LLC or corporation the right way.

Step 2: Know the Deadlines and Timing Rules

Timing your submission of Form 2553 is essential. The IRS has strict rules on when this election must be filed:

If you miss the deadline, you can attach a request for late election relief under Revenue Procedure 2013-30. However, filing on time is the safest, simplest path forward.

Step 3: Collect Information and Shareholder Consent

Before completing the form, gather all required business and shareholder information. All shareholders must agree to the S-Corp election and sign the form.

What You’ll Need:

• Corporate name, EIN, and business address

• Date and state of incorporation

• Beginning date of intended tax year

• Name and contact info of corporate officer submitting the form

• Names, ownership percentages, and signatures of all shareholder

Note that even a missing signature can lead to rejection. Coordinate with shareholders early and maintain accurate documentation.

If your business doesn’t yet have an EIN, you’ll need one before submitting Form 2553. You can apply directly with the IRS EIN Application portal.

Step 4: Accurately Complete Form 2553

Filing mistakes can delay approval—or worse, result in rejection. Here’s a breakdown of Form 2553:

Common Mistakes to Avoid

• Using an incorrect or incomplete EIN

• Omitting shareholder information or signatures

• Entering the wrong tax year beginning date

Use legible handwriting or complete the form digitally and print. Double-check everything before sending.

Want a refresher on filing other IRS forms for your business? Read our W-9 form walkthrough.

Step 5: Submit Form 2553 and Await IRS Confirmation

Currently, Form 2553 must be mailed to the appropriate IRS service center based on your business address. Electronic filing isn’t available for this form.

Once mailed, give the IRS about 4 to 6 weeks to review and respond. If accepted, you’ll receive a written notice confirming approval.

If there’s an issue, such as a missing signature or a late submission, the IRS may reject your election or request additional information. If you're denied, you may still have recourse—especially if you can show reasonable cause for a late filing.

Always keep a copy of the completed form and proof of mailing.

What to Expect After Your Election Is Accepted

After your S-Corp election is confirmed, there are a few important filing and compliance steps to keep in mind:

• Annually file tax returns using Form 1120S

• Pay shareholder-employees a reasonable salary (subject to employment taxes)

• Track corporate income, distributions, and salaries separately

• Stay current with state-level filing and tax notices (some states don’t recognize federal S-Corp status)

Heads-up: California imposes its own S-Corp franchise tax rules. Learn more in our California S-Corp tax guide.

Plus, don’t forget to keep your business registration and records up to date with the state. Learn to update business records easily.

How Haven Helps Founders File and Manage Form 2553

Filing Form 2553 is just one step in managing your S-Corp election. Ongoing compliance, reporting, and filing obligations require sound organization.

Haven was built for founders who want to move fast without missing details:

• Track IRS forms, deadlines, and state notices automatically

• Get reminders when forms or filings are due — including Form 1120S post-election

• Centralize EIN, incorporation, and S-Corp settings in one secure dashboard

• Access expert support to complete or troubleshoot filings

We take messaging and deadlines off your plate so you can focus on growth.

Filing Form 2553 the Right Way

Filing Form 2553 allows your business to benefit from S-Corporation tax treatment—but only if you meet eligibility rules, follow IRS deadlines, and complete your submission carefully.

To recap:

• Confirm your business qualifies for S-Corp election

• File Form 2553 within 2.5 months of your tax year start—or early for future tax years

• Coordinate with shareholders to get full consent

• Submit by mail and retain proof of filing

• Prepare for new tax obligations, including payroll and Form 1120S

With the right tools and clear steps, electing S-Corp status can be a meaningful advantage for your startup or small business.