Form 2553 Law and Legal Definition

Form 2553 is the s-corporation election form that a startup company must file with the Internal Revenue Service in order to elect pass through taxation. Form 2553 must be filed by the 15th day of the third month after a startup company’s fiscal year in order for the s-corporation election to be applicable for that year.

An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. S corporations do not pay any federal income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.