S-Corp Late Election Relief: Rev. Proc. 2013-30 Explained

By Yarik Yarosh, CPA ·September 5, 2026 ·Updated September 23, 2026 ·6 min read

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

The deadline to file Form 2553 (Election by a Small Business Corporation) is no later than 2 months and 15 days after the beginning of the tax year the election is to take effect. For a calendar-year entity, that’s March 15. Miss it by even one day, and the election is technically effective for the following year, not the current one. This is a common problem: a business owner forms an LLC in January, operates all year as an S-Corp, but doesn’t file Form 2553 until April. Without relief, they’d be taxed as a sole proprietor or partnership for the current year. Rev. Proc. 2013-30 provides a streamlined process to fix this, and it’s used thousands of times every year.

✓Key takeaway

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

Normal deadline:

Form 2553 must be filed by the 15th day of the 3rd month of the tax year (March 15 for calendar-year entities)
For new entities: within 2 months and 15 days of formation
If filed late: election is effective the FOLLOWING year (not the current year)

Rev. Proc. 2013-30 requirements (ALL must be met):

The entity intended to be classified as an S-Corp as of the intended effective date
The entity failed to qualify solely because Form 2553 was not filed timely
The entity has reasonable cause for the late filing
Less than 3 years and 75 days have passed since the intended effective date
No returns inconsistent with S-Corp status have been filed (or only S-Corp returns have been filed)

How to file:

File Form 2553 with “FILED PURSUANT TO REV. PROC. 2013-30” written at the top
Attach a statement explaining the reasonable cause for the late filing
Include the intended effective date
File with the IRS service center (or attach to the entity’s first S-Corp return)

Reasonable cause examples that typically work:

The entity’s accountant or attorney failed to file the election timely
The taxpayer was unaware of the filing requirement
The entity relied on a professional who did not file on time
Administrative delays or errors
The entity was newly formed and the owner did not know about the deadline

What does NOT work:

“I chose not to file because I wasn’t sure” (indecision is not reasonable cause)
Filing more than 3 years and 75 days late (outside the Rev. Proc. window)
Returns filed inconsistently (e.g., filing a partnership return when you intended S-Corp)

The 3-year-and-75-day window: For a calendar-year entity wanting S-Corp status for 2024:

Intended effective date: January 1, 2024
Normal deadline: March 15, 2024
Rev. Proc. 2013-30 window: until approximately March 17, 2027
After March 17, 2027: must request a PLR (private letter ruling) from the IRS, which costs $10,000+

If returns were already filed inconsistently:

Rev. Proc. 2013-30 may still apply if reasonable cause exists
Amended returns may need to be filed to conform
The IRS has been generous with late elections when the entity clearly operated as an S-Corp

How does the late election work in practice?

Hypothetical example

Round numbers. For current guidance, see IRS S corporation guidance. An LLC formed in February 2024. The owner intended to elect S-Corp status immediately but forgot to file Form 2553. The LLC has been operating as a sole proprietorship for tax purposes. It’s now October 2025.

Without late election relief:

2024: taxed as a sole proprietor (Schedule C)
All $120,000 in net profit subject to SE tax: $120,000 x 92.35% x 15.3% = $16,945
2025: if Form 2553 is filed now, S-Corp is effective January 1, 2026
The owner loses $16,945 in SE tax savings for 2024 and most of 2025

With Rev. Proc. 2013-30:

File Form 2553 with “FILED PURSUANT TO REV. PROC. 2013-30” written at the top
Intended effective date: February 1, 2024 (date of formation)
Reasonable cause statement: “The owner was unaware of the Form 2553 filing deadline. The entity has been operating as though it were an S-Corp and intends to file all returns as an S-Corp.”
Result (if accepted): S-Corp status retroactive to February 1, 2024

Tax savings from retroactive election (2024):

As sole proprietor: SE tax of $16,945
As S-Corp ($55,000 salary): FICA of $55,000 x 15.3% = $8,415
SE tax savings: $8,530 for 2024 alone

Cost of filing the late election: $0 (no IRS fee). The only cost is preparing the Form 2553 and the reasonable cause statement.

What the CPA does:

Prepares Form 2553 with the Rev. Proc. 2013-30 header
Writes the reasonable cause statement
Files with the IRS service center
Sets up payroll for the owner (retroactive to the intended effective date)
Files the 2024 Form 1120-S (S-Corp return) instead of Schedule C
Issues a W-2 to the owner for the reasonable salary

Timeline to resolution: The IRS processes Rev. Proc. 2013-30 requests within 60-120 days. If accepted, the IRS sends a determination letter confirming the S-Corp election. If denied (rare, when all requirements are met), the taxpayer can appeal or request a PLR.

More than 3 years late? If it’s been more than 3 years and 75 days, the only option is a Private Letter Ruling (PLR):

Cost: $10,000+ IRS user fee (plus professional fees)
Timeline: 6-12 months
Success rate: high if the entity has been operating consistently as an S-Corp
Only worth pursuing if the tax savings justify the cost

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

Does late election relief bring the S-Corp salary rule too?

Yes. If the IRS accepts a Rev. Proc. 2013-30 request, the business is treated as an S-Corp from the intended date, and an owner who works in the business is an S-Corp shareholder-employee for payroll tax. The IRS says reasonable compensation has to be paid before non-wage distributions.

That’s a real issue for an owner like the one in the example, who ran the LLC for more than a year without filing Form 2553. If the money came out as owner draws with no W-2 wages, the S-Corp years then show distributions to a working owner and no salary, which is the pattern the IRS can reclassify as wages.

How much counts as reasonable isn’t fixed. The Code and regulations give no specific guideline. In Watson, the court looked at the owner’s experience, hours, firm earnings and what similar professionals were paid, and set his pay at $91,044 a year against the $24,000 he’d paid himself.

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Cite this page

Yarik Yarosh, CPA. "S-Corp Late Election Relief: Rev. Proc. 2013-30 Explained." Blue Cloud CPA, September 5, 2026, updated September 23, 2026. https://bluecloudcpa.com/guides/small-business-scorp-late-election-rev-proc-2013-30

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

S-Corp Late Election Relief: Rev. Proc. 2013-30 Explained

How does the late election work in practice?

Does late election relief bring the S-Corp salary rule too?

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