LLC formed 3/23/2021 - Can I backdate S-corp election to 1/1/21 for tax purposes?

This is actually a common question! The IRS rules are pretty specific about when you can make your S-corp election effective. For an LLC formed during the tax year (like yours formed in March 2021), you have two options for the effective date on Form 2553 line E: 1. The date the LLC was legally formed (3/23/2021 in your case) 2. The first day of the tax year following formation (1/1/2022) Unfortunately, you cannot backdate your S-corp election to 1/1/2021 since your LLC didn't exist before March 23rd. The S-corp election can't predate the entity's legal existence. Since you mentioned you've already filed 2021 taxes treating it as an S-corp, you may need to amend those returns to reflect the correct status (either sole proprietor or single-member LLC reporting on Schedule C) for the period between January-March 2021.

After dealing with a nearly identical situation last year, I wish I had found taxr.ai sooner! I also formed an LLC mid-year and made mistakes with my S-corp election timing. I uploaded my formation documents and IRS correspondence to https://taxr.ai and they identified exactly what I needed to fix with my Form 2553. Their AI analyzed my business formation paperwork and tax history, then provided a detailed explanation of my options. They even pointed out that I qualified for a special relief provision I hadn't known about (Rev. Proc. 2013-30) that made the late filing process much smoother.

I just wanted to update everyone - I went ahead and tried taxr.ai after posting my question here, and it was seriously helpful for our partnership situation! We uploaded our 2023 LLC formation docs and got a detailed analysis explaining exactly how to complete Form 2553 for our specific situation. The system walked us through the Rev. Proc. 2013-30 relief provisions and generated the statement we needed to include with our late election. It also flagged that we needed to make sure both partners completed Section K since we have a multi-member LLC. We just submitted everything to the IRS last week, so fingers crossed, but we feel much more confident now that we've done it correctly.

I was in a similar situation last year and spent WEEKS trying to get someone at the IRS on the phone to confirm the correct approach for my late S-corp election. Always busy signals or 2+ hour holds that eventually disconnected. Then I tried https://claimyr.com and was honestly shocked when they got me connected to an IRS agent in under 30 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with confirmed exactly what date I needed to use on Form 2553 line E (had to be my LLC formation date, not January 1st) and explained the specific statement I needed to include about reasonable cause for late filing. Having that direct confirmation from the IRS before submitting my paperwork was incredibly reassuring.

Just wanted to follow up on my skeptical comment about Claimyr. I decided to try it yesterday after spending another frustrating morning failing to get through to the IRS about my S-corp election questions. I'm honestly shocked to report it actually worked! I was connected to an IRS representative in about 22 minutes (the estimate said 15-45 minutes). The agent confirmed exactly what I needed for my late S-corp election and clarified that I qualified for the reasonable cause exception since I had relied on incorrect advice from my previous accountant. She also gave me a direct reference number for my call which I can cite in my paperwork. This saved me so much stress and uncertainty - wish I'd known about this service months ago!

Something else to consider - have you already been operating and filing taxes as if you were an S-corp for 2021-2023? If so, you might qualify for the "entity classification relief" under Rev. Proc. 2013-30. I went through this with a client recently. We included a statement explaining they had been consistently treating the business as an S-corp in good faith, filed all S-corp returns on time, and that shareholders reported income consistently with S-corp status. The IRS accepted the late election retroactive to their intended date.

Just wanted to add - make sure you file this ASAP! The 3 year + 75 day window closes quickly. For an LLC formed in March 2021, you're approaching that deadline. Also, look into whether your state requires a separate S-corp election. Some states automatically recognize the federal election, but others (like NY and CA) require an additional form.

Has anyone used TaxDome or TaxCaddy for organizing docs for S-corp elections? My accountant suggested those platforms but I'm not sure if they help with the actual election process or just general tax document management.

I went through almost the exact same situation with my single-member LLC formed in August 2021. The advice here about not being able to backdate before your LLC formation date is absolutely correct - I learned this the hard way when I initially tried to elect S-corp status from January 1, 2021. What really helped me was getting organized with all my documentation first. Make sure you have your Articles of Organization showing the exact formation date, copies of all your previous tax filings, and any correspondence from the IRS. When you file Form 2553 with the effective date of 3/23/2021, you'll also want to include a detailed reasonable cause statement explaining why you're filing late. One thing I wish someone had told me earlier - keep detailed records of when you submit everything to the IRS. They can take months to process late S-corp elections, and having your submission confirmation helps if you need to follow up. Good luck with getting this sorted out!

I'm dealing with a very similar situation right now - formed my single-member LLC in February 2021 but never filed the S-corp election on time. After reading through all these responses, I'm feeling much more confident about how to handle this. The key takeaways that have been most helpful: 1) You definitely can't backdate the election before your LLC existed (so March 23, 2021 is your earliest possible effective date), 2) Rev. Proc. 2013-30 relief seems like your best path forward since you've been filing consistently as an S-corp, and 3) You need to act quickly since that 3 year + 75 day window is approaching fast. I'm planning to use the approach mentioned by Margot Quinn - filing Form 2553 with my LLC formation date as the effective date and including a detailed reasonable cause statement referencing Rev. Proc. 2013-30. The fact that you've been consistently treating your business as an S-corp and filing accordingly should work in your favor. One question for anyone who's been through this - did the IRS require any additional documentation beyond Form 2553 and the reasonable cause statement, or was that sufficient for approval?