How To Change My LLC to an S Corporation?

This article has been updated with the most recent 2023 IRS guidelines for filing an S-Corp election.

Changing a limited liability company (LLC) to an S corporation is a process that can be done by following the guidelines set forth by the Internal Revenue Service (IRS). To change your LLC to an S corporation, you must file the appropriate forms and meet specific requirements.

You can ignore the details below and file an S-Corp election with us here, and we will take care of the filing for you. Otherwise, feel free to continue reading to learn more about the S-Corp filing process with the IRS.

The first step in changing your LLC to an S corporation is to file Form 2553, Election by a Small Business Corporation. 

This form must be filed by all of the LLC’s shareholders and signed by the company’s president. The form must be filed no later than the 15th day of the third month of the tax year in which the election is to be effective or the 15th day of the third month of the tax year in which the LLC was formed, whichever is later.

In addition to Form 2553, if you want to be taxed as a corporation by the IRS, you might need to file form 8832, Entity Classification Election.

DO NOT FILE this form if you don’t want to be taxed as a corporation.

This form changes the LLC’s tax classification from a partnership or a sole proprietorship to a corporation. The form must be filed no later than the 15th day of the third month after the date on which the LLC was formed or the 15th day of the third month of the tax year in which the election is to be effective, whichever is later.

Once you have filed the appropriate forms and met the requirements, the IRS will process your election and notify you of its approval or denial. If your election is approved, your LLC will be treated as an S corporation for federal tax purposes.

It’s important to note that changing your LLC to an S corporation may also have state tax implications, so you should check with your state’s tax agency to see if any additional steps are required. 

In summary, changing an LLC to an S corporation requires filing Form 2553 and Form 8832 with the IRS.

What are the eligibility requirements for filing an S-Corp election? 

To be eligible to file an S-Corp election, the LLC must have 100 or fewer shareholders, all of whom must be individuals and must not be non-resident aliens.

How do I file an S-Corp election? 

To file an S-Corp election, you must file Form 2553, Election by a Small Business Corporation, with the IRS. This form must be filed by all of the LLC’s shareholders and signed by the company’s president or other authorized representatives.

When is the deadline to file an S-Corp election? 

The Form 2553 must be filed no later than the 15th day of the third month of the tax year in which the election is to be effective or the 15th day of the third month of the tax year in which the LLC was formed, whichever is later.

What are the reasons that the IRS would reject an S-Corp election?

The IRS may reject an S-Corp election for a variety of reasons, including:

1. Filing the election form too late. The IRS will reject the election if the election form is filed after the deadline.
2. Eligibility requirements not met: The LLC must meet specific eligibility requirements to file an S-Corp election, such as having 100 or fewer shareholders, all of whom must be individuals or certain types of trusts and derivatives, and must not be non-resident aliens. The IRS will reject the election if the LLC does not meet these requirements.
3. Incorrect or incomplete information on Form 2553: Form 2553 must be filled out correctly and completely, and any missing or inaccurate information can cause the election to be rejected by the IRS. 
4. Not paying taxes owed: If the LLC has unpaid taxes, the IRS will reject the S-Corp election until the taxes are paid. It is crucial to ensure that all taxes are current and paid before filing for an S-Corp election.

How long does it take the IRS to answer a request for an S-Corp election?

According to the IRS, it can take up to three months for the agency to process an S-Corp election after it has been received. However, it can take longer if the request is incomplete or additional information is needed. It’s also important to note that the processing time may be longer during peak filing seasons. It’s recommended to file the election as soon as possible and ensure you have all the necessary documents and information to avoid delays. Additionally, you can check the status of your S-Corp election by calling the IRS Business & Specialty Tax Line.

How can I check my S-Corp election status?

There are several ways to check the status of your S-Corp election:

1. Contact the IRS by calling the IRS Business & Specialty Tax Line at (800) 829-4933. You’ll need to provide your personal information and the date you filed Form 2553.
2. Check your mail; after the IRS receives your Form 2553, they might send you a letter with a decision.

What should I do if I have to file taxes for my company but don’t receive any information from the IRS about the S-corp election status?

If you haven’t received any information from the IRS about the status of your S-Corp election, there are a few steps you can take:

1. Check the status of your S-Corp election by contacting the IRS Business & Specialty Tax Line at (800) 829-4933 or checking the mail for a letter of acknowledgment from the IRS.
2. File your taxes as an S-Corp if you believe that your election has been processed and approved. Make sure you include a copy of your filed 2553 form and its shipping record of delivery to the IRS.
3. Consult with a tax professional or attorney for guidance and ensure you are taking the appropriate steps.