The normal deadlines
| Election | Who makes it | Deadline | Authority |
|---|---|---|---|
| QSST (section 1361(d)(2)) | Current income beneficiary (or legal representative) | Within the 16-day-and-2-month period beginning on the day the S stock is transferred to the trust; other start dates apply when a C corporation elects S status or a grantor or testamentary trust period ends | Treas. Reg. 1.1361-1(j)(6)(iii) |
| ESBT (section 1361(e)(3)) | Trustee (the trustee or trustees with authority to bind the trust) | Same periods as a QSST election | Treas. Reg. 1.1361-1(m)(2)(iii) |
| QSub (section 1361(b)(3)) | Parent S corporation on Form 8869 | Any time during the year; the effective date can be no more than 2 months and 15 days before, or 12 months after, the filing date | Treas. Reg. 1.1361-3(a)(3), (4) |
For a QSST, Treas. Reg. 1.1361-1(j)(6)(iii)(A) says the election “must be made within the 16-day-and-2-month period beginning on the day that the stock is transferred to the trust.” The regulation's examples show the period in practice: stock transferred on January 1 requires the election by March 16. A QSST election can be made in Part III of Form 2553, but the Form 2553 instructions limit that: “Part III may be used to make the QSST election only if corporate stock has been transferred to the trust on or before the date on which the corporation makes its election to be an S corporation.” Otherwise a separate statement is used, and the deemed owner of the QSST also consents to the S election in column K.
An ESBT election is a statement signed by the trustee and filed with the service center where the S corporation files its return (Treas. Reg. 1.1361-1(m)(2)(i)). IRM 3.13.2.23.22 lists the contents: the names, addresses and TINs of all potential current beneficiaries, the trust and the corporation; a statement that the election is made under section 1361(e)(3); the effective date (not earlier than 2 months and 15 days before filing); and the stock transfer dates. Since 2018, a nonresident alien may be a potential current beneficiary and does not need a TIN for the election if not otherwise required to have one.
What a missed election does
Rev. Proc. 2013-30 explains the trust problem: a failure to make a proper ESBT or QSST election “may result in an inadvertently invalid S corporation election, or in an inadvertent termination of an S corporation election”, because the trust is not an eligible shareholder without the election. That is why late trust elections are tested under the inadvertence standard of section 1362(f) rather than reasonable cause.
A late QSub election does not affect the parent's S status, but it moves the effective date. The Form 8869 instructions say: “An election filed more than 2 months and 15 days after the requested effective date generally is late and will be made effective 2 months and 15 days before the date it is filed.” Until then, the subsidiary is a separate corporation with its own filing requirement. The QSub election itself is a deemed liquidation of the subsidiary into the parent, and Form 966 is not filed for it.
Rev. Proc. 2013-30 general requirements
Section 4.02 applies to all four election types. The requesting entity (the trust beneficiary for a QSST, the trustee for an ESBT, the parent S corporation for a QSub) must have intended the election as of the effective date; must request relief within 3 years and 75 days after the effective date; must have failed to qualify solely because the election was not filed on time; and must show reasonable cause and diligent correction for a QSub, or, for a QSST or ESBT, that the failure was inadvertent and the corporation and requester acted diligently once they found it.
Every statement carries the penalties of perjury declaration from Section 4.03(3), signed by the officer, trustee, current income beneficiary or shareholder as applicable, and each election form needs the reasonable cause or inadvertence statement and the legend described below. Because the procedure replaces the letter ruling process, no user fee applies.
Late QSST and ESBT elections
Section 6.01 requires the trustee of an ESBT or the current income beneficiary of a QSST to sign and file the election, with these statements:
| Statement | QSST | ESBT |
|---|---|---|
| Election information required by the regulations (1.1361-1(j)(6)(ii) or (m)(2)(ii)) | From the current income beneficiary | From the trustee |
| Trust qualification | Trustee states the trust meets section 1361(d)(3) and the income distribution requirements have been and will continue to be met | Trustee states all potential current beneficiaries meet section 1361(b)(1) and the trust meets section 1361(e)(1) other than the election |
| Shareholder consistency | Statements from all shareholders during the period from the intended effective date (or termination) to filing that they reported consistently with the S election | Same |
The relief, if granted, covers both the late trust election and the resulting invalid or terminated S election. IRM 3.13.2.23.21 lists the same three items the campus looks for on a late QSST. Conversions between the two trust types are handled under Rev. Proc. 98-23, which IRM 3.13.2.23.23 says gives automatic consent if the trust qualifies as both and has not converted within the prior 36 months, with both the current income beneficiary and the trustee signing.
Late QSub elections
Section 7 requires the parent S corporation to file a completed Form 8869 with a statement signed by an officer that the subsidiary meets the QSub requirements of section 1361(b)(3)(B) and that all of the subsidiary's assets, liabilities and items of income, deduction and credit were treated as the parent's on all affected returns from the intended effective date. In other words, the parent must have been reporting as though the election were in effect. IRM 3.13.2.24.6 summarizes: “If all conditions are met, the Q Sub can receive up to three years and 75 days relief under Rev. Proc. 2013-30.”
Form 8869 is filed with the service center where the subsidiary filed its most recent return, or where the parent filed if the subsidiary is newly formed and the election is effective on formation (Form 8869 instructions). It is signed by an officer authorized to sign the parent's return. If the subsidiary does not have its own EIN, the instructions say to enter N/A on line 8, and warn that failing to enter an EIN the subsidiary does have may trigger delinquency notices to it.
Filing the request
- Prepare the election (Form 8869 for a QSub; the QSST statement or Form 2553 Part III; the ESBT statement) as it should have been filed, with the intended effective date.
- Write “FILED PURSUANT TO REV. PROC. 2013-30” at the top of the election form (Section 4.03(1)). IRM 3.13.2.24.6 describes the QSub version as Form 8869 with “Rev. Proc. 2013-30” written across the top.
- Attach the reasonable cause or inadvertence statement and the Section 6 or Section 7 statements, each with the dated penalties of perjury declaration.
- File it attached to the current-year Form 1120-S (if all intervening returns are filed), attached to a late prior-year Form 1120-S filed with all other delinquent returns, or on its own with the service center, all within 3 years and 75 days (Section 4.03(2)). Returns carrying a late election are marked “INCLUDES LATE ELECTION(S) FILED PURSUANT TO REV. PROC. 2013-30”.
Several elections for one S corporation can be filed together, each meeting the requirements independently, but they do not have to be. Section 4.04 says: “An application for relief under this revenue procedure by a Requesting Entity will not prejudice subsequent relief requests by the same Requesting Entity, or other Requesting Entities, with respect to a single S corporation.” A late S election for the corporation itself follows Section 5; see late S corporation election relief.
How the campus processes them
For trusts, IRM 3.13.2.23.20 has the examiner input TC 100 for an accepted QSST (generating CP 288) and IRM 3.13.2.23.22 has TC 102 for an accepted ESBT (generating CP 290). When a QSST election turns out to be late, the instruction is to “Contact the taxpayer by phone and inform them of Rev. Proc. 2013-30.” and have the information faxed in. The fallback is severe: “If unable to contact the taxpayer, input TC 096 on the EIN of the S corporation.” That terminates the S election on the campus records, with Letter 326C explaining that the late QSST election terminates it. For an ESBT that does not qualify, the IRM likewise directs the examiner to attempt phone contact to explain Rev. Proc. 2013-30 before terminating. A representative's phone number on file matters here.
Both trust elections are effectively irrevocable without the IRS: “Neither election can be revoked without the permission of the Commissioner, via Chief Counsel.” (IRM 3.13.2.23.19). A trust that does not want QSST or ESBT status going forward needs consent, or a Rev. Proc. 98-23 conversion between the two.
For a QSub, IRM 3.13.2.24.6 has the examiner correct the effective date on both accounts: the closing transaction on the subsidiary's EIN (TC 590 closing code 013, which generates CP 279A to the subsidiary) and TC 082 on the parent (which generates CP 279). Rev. Proc. 2022-19 notes that a missing CP 279 or CP 279A does not affect a valid QSub election and that replacements can be requested.
Outside the procedure
If more than 3 years and 75 days have passed, or another requirement fails, Section 3.02 of Rev. Proc. 2013-30 points to a letter ruling. For QSST and ESBT failures, that is a request under section 1362(f) for inadvertent invalid election or termination relief; see inadvertent S corporation terminations. For a QSub, Rev. Proc. 2013-30 treats the election as a regulatory election eligible for an extension under Treas. Reg. 301.9100-3; see section 9100 relief. Under Rev. Proc. 2026-1, Appendix A, a 301.9100-3 ruling costs $14,500 for 2026 requests (reduced fees of $3,450 and $9,775 below the gross income thresholds).
A terminated QSub cannot simply re-elect. IRM 3.13.2.24.8 notes that without the Commissioner's consent, a former QSub generally cannot re-elect QSub or S status within five years, with an exception where the subsidiary is sold to an unrelated S corporation that elects immediately.
Questions practitioners ask
Who signs a late QSST election?
The current income beneficiary (or legal representative) signs the election, and the trustee signs a statement that the trust meets the QSST requirements and the income distribution requirements (Rev. Proc. 2013-30, Section 6.01).
Is the standard for late trust elections reasonable cause?
No. For QSST and ESBT elections, Section 4.02(4) requires that the failure was inadvertent and that the S corporation and the requester acted diligently once it was discovered. Reasonable cause applies to late S and QSub elections.
Can a QSST election be made before the corporation files Form 2553?
IRM 3.13.2.23.21 says a QSST election filed before the corporate election is returned to the beneficiary with a request to resubmit it with the Form 2553, and one filed before the stock transfer is invalid until the transfer occurs.
Does a late QSub election need a Form 966?
No. The Form 8869 instructions say the QSub election is a deemed liquidation, so Form 966 is not filed, although the subsidiary may need a final return for the period before the deemed liquidation.
Do all shareholders have to give statements for a late QSST election?
Yes. Section 6.01(4) requires statements from all shareholders during the period from the intended effective date (or termination) to the filing date that they reported consistently with the S election.