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NY state (USA) here. If a 1-man NYS LLC wishes to elect S-corporation taxation status, they must file a Form 2553 with the IRS, and a Form CT-6 with the NYS Department of Taxation and Finance.

At a later time, they may wish to undo these tax elections and revert back to an LLC that elects "normal" LLC taxation status.

What forms must it fill out, both federal and state, to make this change?

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  • It is important to note that the premise in your first paragraph is incomplete. One must complete IRS Form 8832 to elect to be taxed as a corporation rather than as a disregarded entity before a firm is eligible to file Form 2553 and Form CT-6. irs.gov/pub/irs-pdf/f8832.pdf The answer is largely embedded in that observation but I don't have time to spell it out at the moment.
    – ohwilleke
    Sep 27, 2022 at 20:27
  • Hmmm @ohwilleke, from that link: "An eligible entity is classified for federal tax purposes under the default rules described below unless it files Form 8832 or Form 2553". I interpret that as: "default rules apply unless you file either Form 8832 or Form 2553." So, at least according to that blurb, does not require you to first file 8832 and then only 2553 once eligibility is unlocked...no?
    – hotmeatballsoup
    Sep 28, 2022 at 0:10

2 Answers 2

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+350

Edit: I misunderstood the situation and will amend but leave original answer below with comment.

For an LLC to stop being treated as S Corp, file Form CT-6.1 with NYS DTF.

For the IRS, there is no form(IRS source). Instead you have to file a statement to the service center where you file tax returns. The statement should state:

  • The corporation revokes the election made under Section 1362(a)
  • Name of the shareholder(s),
  • Address of the shareholder(s),
  • Taxpayer identification number of the shareholder(s),
  • The number of shares of stock owned by the shareholder(s),
  • The date (or dates) on which the stock was acquired
  • The date on which the shareholder's taxable year ends
  • The name of the S corporation
  • The S corporation's EIN
  • The election to which the shareholder(s) revokes
  • The statement must be signed by the shareholder(s) under penalties of perjury
  • Signature and consent of shareholder(s) who collectively own more than 50% of the number of issued and outstanding stock of the corporation, whether voting or non-voting)
  • Indication of the effective date of the revocation (or prospective date)
  • Signature of person authorized to sign return

My first answer below applied to S Corps wanting to become LLC, which is not what was asked:

New York does not allow a corporation to change into an LLC. Instead you must create a new LLC by filing Articles of Organization and then have the S Corp assumed by the new LLC by filing a Certificate of Merger. Both filings are with the NY Department of State. If this is your livelihood, please talk to a lawyer.

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  • This applies to an LLC that elected S-corp taxation?
    – hotmeatballsoup
    Oct 3, 2022 at 12:42
  • @hotmeatballsoup I fixed the answer
    – IKnowNothing
    Oct 3, 2022 at 13:31
  • Amazing answer thanks @IKnowNothing (+1) -- I'll leave this open for another day or 2 in case anything else crops up but I really appreciate this
    – hotmeatballsoup
    Oct 3, 2022 at 16:02
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Single-member NY state LLCs do not have to file taxes regardless of what tax status they have previously elected. This is known as the S Corp loop hole.

At the Federal level, filing a Form 1120 is all you need.

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  • The question is how to be taxed going forward as a sole proprietorship if one has previously been taxed as an S-corporation. This answer addresses what forms to complete while you are an S-corporation which is non-responsive.
    – ohwilleke
    Oct 2, 2022 at 22:36
  • Actually I am asking what forms need to be filed @ohwilleke. It's literally the last sentence of my question... and the title of the question.
    – hotmeatballsoup
    Oct 3, 2022 at 12:47

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