# Filing Form 2553 and the California S Election

> How to file Form 2553 for a California LLC or corporation: the deadline, community property spouse consent, where to send it, late relief, and the FTB's rules.

Source: https://ridleylawoffices.com/s-corp-election-form-2553-california/

**Short answer:** Form 2553 is the IRS form a corporation or LLC files to be taxed as an S corporation. File it within 2 months and 15 days after the start of the tax year the election should begin, signed by every shareholder and, in California, by any spouse with a community property interest. California has no separate election. The FTB follows the federal one, so the business files Form 100S and pays the 1.5% tax.

- Deadline: no more than 2 months and 15 days into the tax year, or any time in the year before (26 U.S.C. § 1362(b)).
- Every shareholder consents, and both spouses consent when the stock is community property (26 C.F.R. § 1.1362-6(b)(2)(i)).
- A valid federal S election makes the entity an S corporation for California (Rev. & Tax. Code § 23801(a)).
- Late-election relief is generally available within 3 years and 75 days under Rev. Proc. 2013-30 (IRS, Instructions for Form 2553).

Form 2553 is two pages that decide how your business is taxed for years. Most of the problems I fix come from the California side: a spouse who didn’t sign, an operating agreement that conflicts with the election, or an owner who assumed the FTB needed its own form. This page covers who can file, when, how to fill it out for a California business, what California does with it, and what to do if you missed the deadline. Whether you should elect at all is on [LLC vs. S corp in California](https://ridleylawoffices.com/llc-vs-s-corp-california/).

## What is Form 2553?

Form 2553, Election by a Small Business Corporation, is how a corporation or an LLC elects S corporation status under 26 U.S.C. § 1362(a). Once the IRS accepts it, the business files Form 1120-S and its income passes through to the owners.

The IRS describes it as the form a corporation, or another entity eligible to be treated as a corporation, files to make the election ([IRS, Instructions for Form 2553](https://www.irs.gov/instructions/i2553)). That second category is how LLCs use it. When an eligible LLC timely files Form 2553, it’s treated as also electing to be classified as a corporation, so it doesn’t need Form 8832 ([26 C.F.R. § 301.7701-3(c)(1)(v)(C)](https://www.law.cornell.edu/cfr/text/26/301.7701-3)).

## Who can file Form 2553?

A domestic corporation or LLC can elect if it meets the small business corporation tests. It must have no more than 100 shareholders, only eligible kinds of shareholders, no nonresident alien shareholders, and one class of stock ([26 U.S.C. § 1361(b)(1)](https://www.law.cornell.edu/uscode/text/26/1361)).

- **Eligible shareholders.** Individuals, estates, certain trusts, and certain exempt organizations. A partnership, a corporation, or a multi-member LLC can’t own shares (26 U.S.C. § 1361(b)(1)(B)). A single-member LLC that’s disregarded can hold shares if its owner is eligible, and the owner is listed on the form (IRS, Instructions for Form 2553).
- **Spouses and families.** A married couple and their estates count as one shareholder for the 100 limit, and so can members of a family (IRS, Instructions for Form 2553).
- **Living trusts.** A revocable trust treated as owned by a U.S. citizen or resident can hold S stock (26 U.S.C. § 1361(c)(2)(A)(i)). After the owner dies, the trust can keep holding it for two years (26 U.S.C. § 1361(c)(2)(A)(ii)). A trust that continues longer usually needs its own election; see [what happens to an LLC when the owner dies](https://ridleylawoffices.com/llc-owner-dies-california/).
- **One class of stock.** All shares must carry identical rights to distributions and liquidation proceeds, though voting differences are allowed (26 U.S.C. § 1361(c)(4)). Whether rights are identical is judged from the charter, bylaws, state law, and binding agreements, which for an LLC includes the operating agreement ([26 C.F.R. § 1.1361-1(l)(2)(i)](https://www.law.cornell.edu/cfr/text/26/1.1361-1)).

### Two California traps in the eligibility rules

**Operating agreements written for partnership taxation.** Many multi-member California LLC agreements have capital accounts, preferred returns, or special allocations. Those can create a second class of stock once the LLC elects. Before filing, revise the [operating agreement](https://ridleylawoffices.com/california-llc-operating-agreement/) so distributions follow ownership.

**A spouse who isn’t a U.S. resident.** California is a community property state. Property acquired during marriage while living here is generally community property ([Fam. Code § 760](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=760)). If a U.S. shareholder’s nonresident alien spouse has a current ownership interest in the stock under community property law, the corporation doesn’t qualify (26 C.F.R. § 1.1361-1(g)(1)(i)). Relief for that kind of inadvertent termination can be requested under 26 U.S.C. § 1362(f), but it’s far better to plan around it first.

## When is Form 2553 due?

File it no more than 2 months and 15 days after the beginning of the tax year the election is to take effect, or at any time during the tax year before ([26 U.S.C. § 1362(b)](https://www.law.cornell.edu/uscode/text/26/1362)). An election filed after that window generally takes effect the following year (26 U.S.C. § 1362(b)(3)).

The IRS counts the 2 months from the day the tax year begins to the day before the same date two months later, then adds 15 days (IRS, Instructions for Form 2553). Examples:

| Situation | Tax year begins | Last day to file |
| --- | --- | --- |
| Existing calendar-year business electing for 2027 | January 1, 2027 | March 15, 2027 |
| New LLC whose first tax year begins mid-year | May 12, 2026 | July 26, 2026 |
| New corporation whose first year begins in January | January 7 | March 21 (the IRS’s own example) |

A brand-new entity can’t file before its first tax year begins. The IRS says an election made before that date won’t be valid (IRS, Instructions for Form 2553). An existing business can file any time during the prior year.

## How do I fill out Form 2553 for a California business?

Most of the form is basic information. Three parts need care: the effective date, the shareholder list, and the consents.

1. **Name, EIN, and address.** Use the name as it appears on the articles filed with the Secretary of State and the EIN the IRS issued to the entity.
2. **Line E, the effective date.** This is the first day of the tax year the election should begin. The filing deadline runs from this date.
3. **Tax year.** Most small businesses use the calendar year. A fiscal year needs a business purpose or another listed basis, handled in Part II.
4. **Shareholder columns.** List every shareholder who must consent. For an election filed before the effective date, that’s everyone who owns stock on the day the election is made. For one filed on or after the effective date, it includes anyone who owned stock at any time from the effective date to the filing date (IRS, Instructions for Form 2553).
5. **Column K, the consents.** Every required shareholder signs and dates. When an individual and a spouse have a community interest in the stock or its income, both must consent ([26 C.F.R. § 1.1362-6(b)(2)(i)](https://www.law.cornell.edu/cfr/text/26/1.1362-6)). In California that usually means the non-owner spouse signs too, even when only one spouse is on the membership ledger.
6. **Entity signature.** A person authorized to sign for the corporation or LLC signs the election itself, separate from the shareholder consents.
7. **Part III, if a trust is involved.** Certain trusts make their own election here. Ask me or your CPA before a trust becomes a shareholder.

The consent rule in the statute is strict: the election is valid only if all persons who are shareholders on the day it’s made consent (26 U.S.C. § 1362(a)(2)). If a shareholder’s consent was missed on an otherwise timely election, the regulations and IRS guidance provide a path to fix it (IRS, Instructions for Form 2553).

## Where do California businesses send Form 2553?

California businesses file with the IRS service center in Ogden, Utah, by mail or by fax to 855-214-7520 (IRS, Instructions for Form 2553). The IRS notes that filing addresses can change and points filers to its [Form 2553 where-to-file page](https://www.irs.gov/filing/where-to-file-your-taxes-for-form-2553), so check it the day you file.

Send the original, not a photocopy, and if you fax it, keep the original in the company records. Keep proof. The IRS accepts a timely postmarked certified or registered mail receipt, a Form 2553 with an accepted or received stamp, or an IRS acceptance letter (IRS, Instructions for Form 2553).

The IRS generally responds within 60 days. If you haven’t heard within 2 months, the instructions say to follow up at 1-800-829-4933 (IRS, Instructions for Form 2553). Don’t file Form 1120-S for any year before the election takes effect.

## Does California require a separate S corporation election?

No. A corporation with a valid federal S election is an S corporation for California ([Rev. & Tax. Code § 23801(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=23801)), whether or not it’s incorporated in California (§ 23801(b)). An LLC that elects is classified the same way for California as it is federally ([Rev. & Tax. Code § 23038(b)(2)(B)(ii)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=23038)).

Once the election is in effect, the California return, tax, and payroll all change.

- **The return.** The business files California Form 100S ([FTB, S corporations](https://www.ftb.ca.gov/file/business/types/corporations/s-corporations.html)). An LLC stops paying the LLC tax and filing Form 568, because for the LLC tax a “limited liability company” means one that isn’t taxable as a corporation for California purposes ([Rev. & Tax. Code § 17941(d)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=17941)).
- **The tax.** California taxes the S corporation at 1.5%, with the $800 minimum franchise tax ([Rev. & Tax. Code § 23802(b)(1) and (c)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=23802)). The FTB waives the minimum tax for a newly formed or qualified S corporation’s first taxable year, but first-year income is still taxed at 1.5% (FTB, S corporations).
- **Payroll.** Officers of a corporation and members of an LLC treated as a corporation are employees for California unemployment insurance ([Unemp. Ins. Code § 621(a) and (f)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=UIC&sectionNum=621)). Register with the EDD before the first paycheck. Setting the amount is covered on [S corp reasonable salary for California owners](https://ridleylawoffices.com/s-corp-reasonable-salary-california/).

## What if I missed the Form 2553 deadline?

You can usually still get the election for the year you wanted. The IRS grants relief for late S elections that are due to reasonable cause, generally if requested within 3 years and 75 days of the intended effective date (IRS, Instructions for Form 2553).

Rev. Proc. 2013-30 sets these requirements.

- Write “FILED PURSUANT TO REV. PROC. 2013-30” in the top margin of the first page of Form 2553.
- Explain the reasonable cause and the steps you took once you found the mistake, on line I or an attached statement.
- Include statements from all shareholders during the gap that they reported income consistently with S status. Signed column K consents satisfy this.
- File the form separately, or attach it to a current Form 1120-S if earlier returns are filed. A late election attached to Form 1120-S needs its own heading on that return.

An LLC that also missed its entity classification election can get relief for both at once within the same 3 years and 75 days, if it meets the listed conditions (IRS, Instructions for Form 2553). Outside those procedures, the corporation generally needs a private letter ruling and a user fee.

**California follows the relief.** Under Rev. & Tax. Code § 23801(h)(1), the federal provision letting the IRS treat late elections as timely, IRC § 1362(b)(5), applies for California purposes. When the IRS accepts a late election, California treats the corporation as an S corporation for the year the election should have been made, and the FTB can ask for a copy of the IRS acceptance (§ 23801(h)(2)). Keep that letter with the corporate records.

If the business already filed California Form 568 or Form 100 for a year the late election now covers, your CPA will need to amend. Tell them before you file the late election, not after.

## How do I end an S election?

Shareholders holding more than one-half of the shares can revoke it (26 U.S.C. § 1362(d)(1)(B)). It also ends automatically if the corporation stops qualifying, for example by taking on an ineligible shareholder. A federal termination ends the California S status at the same time, unless it’s an inadvertent termination the IRS relieves (Rev. & Tax. Code § 23801(e)(1)).

After a termination or revocation, the corporation generally needs IRS consent to elect again before the fifth tax year after the change took effect (IRS, Instructions for Form 2553). For an LLC, dropping corporate classification is treated as a liquidation for tax purposes (26 C.F.R. § 301.7701-3(g)(1)(iii)). Both reasons to get the decision right the first time. Closing an S corporation entirely is a separate process; see [how to close an S corp in California](https://ridleylawoffices.com/how-to-close-s-corp-california/).

Co-owners should also agree in writing that no one will transfer shares to an ineligible owner. That belongs in a [buy-sell agreement](https://ridleylawoffices.com/buy-sell-agreement-california/) or the operating agreement.

## Frequently asked questions

### Can I file Form 2553 online?

The instructions provide for mail or fax, not online filing, and California filers use the Ogden service center (IRS, Instructions for Form 2553). Certain late elections can be attached to a Form 1120-S instead. Keep your fax confirmation or certified mail receipt as proof.

### How long does it take the IRS to approve Form 2553?

The IRS says a corporation should generally receive a determination within 60 days after filing. If you don’t hear within 2 months, call the number in the instructions. If you checked box Q1 in Part II to request a fiscal year, expect about 90 more days.

### Does my spouse have to sign Form 2553 in California?

Usually yes. When a husband and wife own stock as community property, or the income from it is community property, each spouse must consent (26 C.F.R. § 1.1362-6(b)(2)(i)). In California, stock acquired during marriage is presumptively community property, so the non-owner spouse typically signs.

### Does an LLC need Form 8832 before Form 2553?

No. A timely Form 2553 from an eligible LLC is treated as its election to be classified as a corporation too (26 C.F.R. § 301.7701-3(c)(1)(v)(C)). Filing both is unnecessary and can create conflicting effective dates.

### Do I have to tell the California FTB about my S election?

No separate election is filed. California follows the federal election automatically (Rev. & Tax. Code § 23801(a)). You tell the FTB by filing Form 100S for the first S year.

### What happens if my Form 2553 is rejected?

The IRS notifies the entity if its election isn’t accepted (IRS, Instructions for Form 2553). In my experience the usual causes are a missing consent or a late filing. Many defects can be cured, either by supplying the missing consent or by refiling under the late-election procedure. Fix the underlying issue, such as an ineligible shareholder or a second class of stock, before you refile.

More in this series

- [LLC vs. S corp in California](https://ridleylawoffices.com/llc-vs-s-corp-california/)
- [Single-member LLC or S corp election](https://ridleylawoffices.com/single-member-llc-vs-s-corp-california/)
- [S corp reasonable salary for California owners](https://ridleylawoffices.com/s-corp-reasonable-salary-california/)
- [C corp vs. S corp for a California small business](https://ridleylawoffices.com/c-corp-vs-s-corp-california/)
- [Spouses owning an LLC together](https://ridleylawoffices.com/spouses-owning-llc-california/)
- [The California LLC operating agreement](https://ridleylawoffices.com/california-llc-operating-agreement/)
- [All business owner guides](https://ridleylawoffices.com/business-guides/)

Reviewing an election, preparing shareholder consents, or revising an operating agreement for S status is billed at $500 per hour; see [fees](https://ridleylawoffices.com/fees/). New entities are a flat fee through [entity formation](https://ridleylawoffices.com/entity-formation/).

[Talk to Eric](https://ridley.click/eric-60)

Book a consultation at [ridley.click/eric-60](https://ridley.click/eric-60) or call 805-244-5291. I work with business owners in Ventura, Santa Barbara, and Los Angeles counties by Zoom or phone.

**Please read:** This page is general information about California law as of September 2026. It isn’t legal, tax, or financial advice, and reading it doesn’t make you my client. Your CPA should prepare or review the election and the returns that follow it. An attorney-client relationship starts only with a signed engagement agreement.