How the deadline is counted
The election can be made at any time during the tax year before the one it is for, or no more than 2 months and 15 days after that year begins. The first day counts.
For a calendar-year business electing from 1 January, that is 15 March. For a business whose first day is 14 October, it is 28 December.
A form that arrives a day late is a late election. It is not lost, but it needs the relief described below rather than the ordinary route.
Not sure the election saves you anything yet? Put your own profit through it first: the S-corp vs sole proprietor calculator.
When a new business’s clock starts
A new corporation’s first tax year begins on the earliest of three dates: the day it first has shareholders, first acquires assets, or begins doing business. In practice that is usually the date the state files it.
That is why a business formed in November or December so often ends up with a short first year: a few weeks that need their own return. Some states let the formation document name a later start date. New York lets a corporation’s certificate say its existence begins on a date up to 90 days after filing, so a business filed in December can start on 1 January.
An LLC that wants S-corp treatment files Form 2553 directly. The election to be taxed as a corporation is made by the same form, so a separate Form 8832 is not needed.
Who signs, and where it goes
Every shareholder consents by signing the form, and an officer signs it for the business. A form missing any shareholder’s consent is not a valid election.
It is faxed or mailed to the IRS service center for the business’s state; the instructions list them. Keep the fax confirmation or the mailing receipt, because that is your proof of the date.
What the IRS sends back
Acceptance arrives as letter CP261, usually within about 60 days. Keep it with the business’s records: lenders and accountants ask for it.
If nothing has come after two months, the instructions say to call the IRS business line. An election that was never received is much easier to fix early than at the first return.
If you missed it
Revenue Procedure 2013-30 gives most late elections a simplified route, available until 3 years and 75 days after the date the election was meant to start.
The late form carries “FILED PURSUANT TO REV. PROC. 2013-30” at the top and explains the reasonable cause for the delay. Every shareholder has to have reported their income as if the election were already in effect.
Past that window the remaining route is a private letter ruling, which is slow and expensive. It is worth an accountant’s time before you get there.
The state may want its own form
Some states follow the federal election automatically and some do not. New York does not: a New York S-corp also files Form CT-6, on the same timing as the federal deadline, and can file it with the federal acceptance marked as pending.
New York City does not recognise the S election at all, so a corporation doing business in the city still owes the city’s corporation tax.