Complete Guide to Forming an S Corporation in New York State
Your comprehensive roadmap to S Corporation formation with official forms, deadlines, and compliance requirements based on government sources.
Step-by-Step Process for Incorporating and Electing S Corp Status
The journey from idea to operational S corporation in New York involves four distinct phases, each with critical deadlines that cannot be missed.
Pre-incorporation preparation (1-7 days)
Start by checking name availability through the New York Department of State. While optional, this $5 per name search prevents rejection of your Certificate of Incorporation. Submit your written request to the Division of Corporations at One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. Alternatively, reserve your chosen name for 60 days at $20, extendable twice for additional 60-day periods.
Professional service corporations require additional preparation. If your business involves law, medicine, or other Education Law Title 8 professions, obtain either a Certificate of Good Standing from the appropriate Appellate Division or Form PLS709 from the New York Education Department before proceeding with incorporation.
New York incorporation (1-30 days)
File your Certificate of Incorporation (Form 1239-f) with the New York Department of State, available at https://dos.ny.gov/system/files/documents/2023/01/1239-f.pdf. The certificate requires five essential paragraphs: corporate name (must include "Inc." or "Corp."), corporate purposes, county location, stock structure (typically 200 shares with no par value), and designation of the Secretary of State as service agent. The standard filing fee is $125, with expedited options available: 2-hour processing for $150 additional, same-day for $75 additional, or 24-hour for $25 additional.
Following incorporation, immediately hold your organizational meeting to adopt bylaws, elect directors, and issue stock certificates. New York Business Corporation Law Section 404 mandates this meeting occur after filing but before commencing business operations.
Federal and state S elections (30-75 days from incorporation)
The federal S election represents the most time-sensitive step in the entire process. File IRS Form 2553 within 2 months and 15 days of the beginning of your tax year - for new corporations, this means from your incorporation date. Download the form at https://www.irs.gov/pub/irs-pdf/f2553.pdf and ensure every shareholder signs the consent section. Mail to the IRS service center based on your state: corporations in New York send to Internal Revenue Service Center, Kansas City, MO 64999, or fax to 855-887-7734.
New York requires a separate S election through Form CT-6, available at https://www.tax.ny.gov/pdf/current_forms/ct/ct6_fill_in.pdf. Unlike the automatic federal recognition, New York does not treat your corporation as an S corp without this election unless your investment income exceeds 50% of federal gross income, triggering mandatory S status under Tax Law § 660(i). File CT-6 by the 15th day of the third month following incorporation for New York entities or the date business began for foreign corporations.
Tax registration and compliance setup (ongoing)
Obtain your federal Employer Identification Number through https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online immediately after incorporation. This free service provides instant EIN assignment. New York automatically creates your corporate tax account upon incorporation, sending Form CT-198 to your registered address.
Register for sales tax if selling taxable goods or services through New York Business Express at least 20 days before beginning operations. Employment tax registration follows if you have employees, requiring accounts with both federal (Forms 941, 940) and state systems (unemployment insurance, withholding).
Required Forms and Filings with Specific Form Numbers
Incorporation forms from New York Department of State
Form 1239-f Certificate of Incorporation for Domestic Business Corporation
serves as your primary incorporation document. Professional service corporations use a specialized version requiring additional certifications. Optional forms include the Application for Reservation of Name (no form number assigned) and post-incorporation amendments through Certificate of Change forms.
Federal tax forms from IRS
Form SS-4
creates your Employer Identification Number, while Form 2553 establishes S corporation status. Annual compliance requires Form 1120-S (U.S. Income Tax Return for an S Corporation) with Schedule K-1 for each shareholder. Employment obligations involve Forms 941 (quarterly), 940 (annual FUTA), and W-2 wage statements.
New York State tax forms
Form CT-6
elects New York S corporation treatment, followed by annual Form CT-3-S (New York S Corporation Franchise Tax Return) with Form CT-34-SH (Shareholders' Information Schedule). Corporations expecting over $1,000 in franchise tax file Form CT-400 for estimated payments. Extensions use Form CT-5.4.
Filing Fees and Costs from Official Sources
New York State Fees
Ongoing Costs
Federal filings carry no fees - both the EIN application and Form 2553 S election are free directly through the IRS. Beware third-party websites charging for these services.
Timeline for Formation and Important Deadlines
The complete formation process typically spans 60-90 days from initial planning to operational S corporation status. Name availability searches take 5 business days, while standard incorporation processing requires 7-10 business days. The federal EIN issues immediately online, though Form 2553 acknowledgment takes 8-12 weeks.
Critical Deadlines
Federal S Election
from incorporation date - missing it delays S status by a full year unless you qualify for late election relief under Revenue Procedure 2013-30.
New York CT-6 Election
following incorporation for domestic corporations.
Ongoing Compliance Requirements
Annual tax obligations create a predictable rhythm
Federal Form 1120-S arrives due March 15th annually, with New York's Form CT-3-S sharing the same deadline. Both accept 6-month extensions but require estimated tax payment with the extension request. Quarterly estimated taxes come due April 15, June 15, September 15, and January 15 for corporations expecting to owe over $1,000.
Corporate formalities protect your limited liability
New York Business Corporation Law mandates annual shareholder meetings for director elections and annual board meetings for operational decisions. Document these meetings through written minutes maintained in corporate records. The law requires keeping correct books of account, shareholder records showing names and addresses, and all meeting minutes at your New York office or transfer agent location.
Biennial statements maintain good standing
Every two years, in the anniversary month of incorporation, file your $9 Biennial Statement electronically at https://filing.dos.ny.gov/eBiennialWeb/. This updates officer information, principal address, and board composition. Past-due status affects your Certificate of Status and may prevent business transactions.
Employment obligations follow quarterly cycles
Federal Form 941 reports quarterly withholding and FICA taxes, due the last day of the month following each quarter. Annual Form 940 for federal unemployment tax arrives January 31st. New York requires quarterly Form NYS-45 combining withholding, wage reporting, and unemployment insurance.
New York State Requirements That Differ from Federal
Separate S Election Required
New York does not automatically recognize federal S elections. While the IRS grants S status upon Form 2553 approval, New York requires separate Form CT-6 election unless investment income exceeds 50% of federal gross income.
Entity-Level Taxation
Entity-level taxation persists despite pass-through treatment. Federal S corporations pay no entity tax, but New York S corporations pay a fixed dollar minimum tax based on receipts before income passes through to shareholders.
MTA Tax Exemption
Metropolitan Transportation Business Tax exemption provides unique benefit. New York S corporations escape the MTA surcharge that C corporations must pay.
Mandatory S Election
Mandatory S election triggers surprise many corporations. Corporations with investment income exceeding 50% of federal gross income automatically become New York S corporations under Tax Law § 660(i).
Comprehensive FAQ Section
Can a single-member LLC elect S corporation status?
Yes, through a two-step process confirmed by the IRS. First, file Form 8832 (Entity Classification Election) to elect corporate tax treatment. Then file Form 2553 for S corporation election. The LLC maintains its legal structure while adopting S corporation tax treatment, combining liability protection with tax efficiency.
What makes professional service corporations different?
Professional service corporations in fields covered by Education Law Title 8 must obtain either a Certificate of Good Standing from the appropriate Appellate Division or Form PLS709 from the New York Education Department before incorporating. The corporation name must end with "Professional Corporation" or "P.C." rather than standard corporate designators. Filing fees remain identical at $125.
How do corporations formed outside New York register here?
Foreign corporations file an Application for Authority with the New York Department of State, paying $225 for regular corporations or $200 for professional service corporations. Include a Certificate of Existence from your home state dated within one year. Corporations already doing business in New York before registering must obtain Tax Commission consent by calling (518) 485-2639.
What happens if we miss the S election deadline?
Revenue Procedure 2013-30 provides relief for late elections meeting specific criteria: the corporation intended S status from the effective date, failed solely due to late filing, has reasonable cause, files within 3 years and 75 days of the intended date, and all shareholders confirm they reported income consistently with S status. Otherwise, request a private letter ruling with substantial user fees.
Do we need a separate registered agent in New York?
No. New York mandates designation of the Secretary of State as agent for service of process for all domestic corporations. You cannot use a private registered agent as primary agent but must provide a U.S. address where the Secretary of State forwards process. Update this address through Biennial Statements or Certificate of Change ($30 fee).
How much does ongoing compliance cost annually?
Basic compliance costs include the biennial statement ($9 every two years), fixed dollar minimum tax ($25-$200,000 based on receipts), and professional fees for tax return preparation. Federal returns carry no filing fees. Sales tax certificates of authority require no fees but mandate timely filing of returns even with no tax collected.
Can we convert from C corporation to S corporation?
Yes, existing C corporations file Form 2553 with all required shareholder signatures within the standard deadline. The corporation must meet S eligibility requirements: no more than 100 shareholders, only allowable shareholder types, one class of stock, and no prohibited entity characteristics. New York requires separate Form CT-6 election regardless of how long you've operated as a C corporation.
Official Sources
All information derives from official government sources: New York Department of State (dos.ny.gov), New York Department of Taxation and Finance (tax.ny.gov), and Internal Revenue Service (irs.gov), current as of September 2025.
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