Late Filing of Form 2553 and Payroll Tax Return Concerns
I’m in the process of filing a late Form 2553, and as you know, the effective date must be retroactive to the beginning of the year. My main concern is how to handle the payroll tax returns, specifically Forms 941 and RT-6, since no wages have been paid and all returns would reflect zero liability. My question is: how would you recommend handling the 941s and RT-6 filings in this case to avoid penalties for the quarters that were missed, considering there was no payroll activity?
Quick Answer:
Since you're filing a late Form 2553 seeking retroactive S corporation election, you must file all required payroll tax returns, even if they show zero liability. File amended Forms 941 and RT-6 for the affected quarters, clearly indicating "Zero Return" or similar language on each return. This demonstrates compliance and avoids penalties for failure to file. Attach a copy of your approved Form 2553 to each amended return. Failure to file, even with zero liability, can result in penalties. Consult the IRS instructions for specific filing requirements.
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
