Missed the S-corp deadline? The late election fix, step by step
The short answer
Missing the Form 2553 deadline (generally 2 months and 15 days into the year) is one of the most common — and most fixable — mistakes in small business tax. Rev. Proc. 2013-30 grants automatic late-election relief for up to 3 years and 75 days past the intended effective date if you intended S status, have reasonable cause for the miss, and have acted consistently with being an S-corp. No user fee, no private letter ruling — a properly completed late Form 2553 with the relief statement.
How the fix works
- Confirm eligibility: the entity qualified for S status on the intended date, and the only failure was the late filing.
- Establish consistency: you filed (or will file) returns consistent with S-corp status and no shareholder reported inconsistently.
- Write the reasonable-cause statement — plain and true beats elaborate: "we believed the election had been filed."
- File Form 2553 marked for late relief, citing Rev. Proc. 2013-30, signed by all shareholders — alone or attached to the first 1120-S.
- Then finish the job: payroll setup and a reasonable salary — a rescued election with no payroll behind it just relocates the problem.
Where it goes wrong
- Assuming the election happened because the LLC was formed — formation and election are different filings
- Missing the 3-years-75-days outer window and needing a far harder fix
- Winning the election but skipping payroll, creating the next exam issue
Frequently asked questions
How late can I file a late S-corp election?
Rev. Proc. 2013-30 generally allows relief up to 3 years and 75 days after the intended effective date, if you meet the requirements — including reasonable cause and having filed consistently with S-corp status.
What counts as reasonable cause?
Honest, ordinary explanations usually work: you believed your accountant filed it, you didn't know the deadline, the form was lost. What matters is that you intended S status and acted consistently with it.
Can I make the election effective for this year if I missed the March deadline?
Often yes — the late-election relief exists exactly for this. The election statement rides with Form 2553 citing Rev. Proc. 2013-30, filed on its own or with the first Form 1120-S.
What if I already filed this year as a sole proprietor?
That complicates consistency but doesn't always end the analysis. This is the point where the fix should be designed by a professional rather than a forum thread.
Missed your election?
We handle the relief filing, the reasonable-cause statement, and the payroll catch-up as one clean-up — usually in a single engagement.
Book a free consultation