Late S-Corp Election: How to File After the March 15 Deadline Using Revenue Procedure 2013-30

By Yarik Yarosh, CPA ·September 5, 2026 ·4 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

The S-Corp election (Form 2553) must be filed by March 15 of the year the election is to take effect (for calendar-year entities). Missing this deadline is common, especially for new business owners who did not have a CPA or were unaware of the deadline. The good news: Rev. Proc. 2013-30 provides a simplified late election process that does not require a private letter ruling (PLR) and costs nothing beyond the normal filing.

✓Key takeaway

Late S-Corp election under Rev. Proc. 2013-30:

Time limit: The late election must be filed within 3 years and 75 days of the intended effective date. For example, if the intended effective date is January 1, 2025, the late election must be filed by March 16, 2028.
Requirements:
- The entity must be an eligible entity (meets all S-Corp requirements)
- The entity intended to be classified as an S-Corp from the intended effective date
- The entity and all shareholders reported income consistently with S-Corp treatment (or no returns were filed yet)
- Reasonable cause existed for the failure to file on time
- No shareholder reported income inconsistently with S-Corp treatment on a return that has been filed
How to file:
- Complete Form 2553 (Election by a Small Business Corporation)
- Write “FILED PURSUANT TO REV. PROC. 2013-30” at the top of the form
- Include a reasonable cause statement explaining why the election was late
- All shareholders must sign and consent to the election
- File the form by mail or fax to the IRS service center
Reasonable cause examples (the IRS is lenient on this):
- “The taxpayer was unaware of the requirement to file Form 2553 by March 15”
- “The taxpayer relied on an accountant who failed to file the election timely”
- “The taxpayer formed the business during the year and did not realize the election needed to be filed within 75 days of formation”
IRS acceptance rate: The IRS generally accepts Rev. Proc. 2013-30 elections without pushback as long as the requirements are met. A denial can be appealed.

What if the deadline was missed by over 3 years and 75 days?

Hypothetical example

Round numbers. For current guidance, see IRS Form 2553 instructions. A business owner formed an LLC in 2020 and intended to elect S-Corp status but never filed Form 2553. The owner has been filing as a sole proprietor (Schedule C) for 5 years.

Rev. Proc. 2013-30 isn’t available (more than 3 years and 75 days since the intended January 1, 2021 effective date).

Options:

File Form 2553 for the current year (effective January 1, 2026): This is a prospective election, not late relief. The business operates as a sole proprietorship through December 31, 2025, and as an S-Corp beginning January 1, 2026. No back-dated election, but no additional cost.
Private letter ruling (PLR): Request IRS approval for a retroactive election. Costs $275-$13,500 in user fees (depending on gross income), takes 3-6 months, and requires a strong reasonable cause argument. Generally not cost-effective for small businesses.
Accept the current structure: If the SE tax savings from the S-Corp election don’t justify the additional filing complexity (payroll, 1120-S, reasonable salary), the owner may be better off remaining on Schedule C.

For most business owners, the prospective election (option 1) is the right choice. The past SE tax overpayment is a sunk cost. The forward-looking savings from the S-Corp election begin immediately, and the business can recoup the “lost” years within 2-3 years of S-Corp savings.

Illustrative numbers only, not a real client and not advice for your facts.

How does the qualified business income deduction work with S-Corp income?

S-Corp owners may qualify for the Section 199A deduction of up to 20% of qualified business income (QBI), which reduces taxable income but not self-employment tax. The deduction phases out for specified service trades or businesses (SSTBs) when taxable income exceeds $191,950 (single) or $383,900 (married filing jointly) for 2024. For non-SSTB businesses above the income threshold, the deduction is limited to the greater of 50% of W-2 wages paid or 25% of W-2 wages plus 2.5% of the unadjusted basis of qualified property. This means the W-2 salary an S-Corp pays its owner directly affects the maximum QBI deduction. Setting compensation too low can actually reduce the QBI deduction, partially offsetting the FICA savings.

What are the ongoing compliance costs of an S-Corp versus a sole proprietorship?

An S-Corp requires a separate federal tax return (Form 1120-S), which typically costs $500 to $1,500 in preparation fees. You also need a payroll service for the owner’s reasonable salary, running $500 to $2,000 per year depending on frequency and state requirements. Some states charge an annual S-Corp franchise tax or filing fee (California’s is $800 minimum). A sole proprietorship files Schedule C on the personal return with no separate payroll obligation, making it significantly cheaper to maintain. The S-Corp makes financial sense when the FICA savings on distributions exceed these additional costs, which usually happens at net profits above $50,000 to $60,000.

Related guides:

Sole Proprietorship vs. LLC vs. S-Corp: Which Entity Structure Saves the Most Tax?

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Cite this page

Yarik Yarosh, CPA. "Late S-Corp Election: How to File After the March 15 Deadline Using Revenue Procedure 2013-30." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/small-business-mid-year-s-corp-election

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.