A Missouri S corp is not a separate kind of business entity. It is a federal tax election that an existing Missouri corporation or LLC makes with the IRS, so profits and losses pass through to the shareholders’ personal returns instead of being taxed at the business level. Missouri honors the federal election automatically, which means there is no separate state S-corp filing. To get there, you form a corporation or LLC with the Missouri Secretary of State, file IRS Form 2553, and register with the Missouri Department of Revenue for state tax accounts.
Who Can Elect S-Corp Status
Before you spend time on paperwork, confirm the business can qualify. The IRS imposes strict rules under 26 U.S.C. § 1361, and missing any of them either blocks the election or terminates it later.1Office of the Law Revision Counsel. 26 USC 1361 – Small Business Corporation
- No more than 100 shareholders. Family members can elect to count as a single shareholder.
- Shareholders must be U.S. citizens or resident aliens, certain trusts, or estates. Other corporations, partnerships, and nonresident aliens generally cannot hold shares.
- Only one class of stock. Differences in voting rights alone do not create a second class.
- The entity must be organized in the United States. Insurance companies and certain financial institutions are ineligible.
If the business later takes on a disqualifying shareholder or issues a second class of stock, the election ends on the date of the triggering event, not at year-end.
Step 1: Form a Corporation or LLC in Missouri
You need a legal entity before you can make the election. That means filing Articles of Incorporation (for a corporation) or Articles of Organization (for an LLC) with the Missouri Secretary of State.
Name and Registered Agent
Your business name has to be distinguishable from other entities already on file. A corporation’s name must include a designator like “Corporation,” “Company,” “Incorporated,” or “Limited,” or an abbreviation of one of these.2Missouri Revisor of Statutes. Missouri Code 351.110 – Corporate Name An LLC name must include “Limited Liability Company,” “Limited Company,” or an abbreviation such as “LLC.”3Missouri Revisor of Statutes. Missouri Code 347.020 – Name of Company Regulated Run a business search on the Secretary of State’s site before filing. Discovering the name is taken after submission is a common delay.
Every Missouri corporation must continuously maintain a registered agent with a physical Missouri address.4Missouri Revisor of Statutes. Missouri Code 351.370 – Registered Office and Registered Agent The agent can be a Missouri resident or a corporation authorized to do business in the state, and it receives legal notices on behalf of the business. You can serve as your own agent if you qualify, or hire a commercial service, which typically costs between $50 and $250 per year.
Filing Fees
Missouri’s fees depend on the entity type and how you file.5Missouri Secretary of State. Schedule of Fees and Charges
- LLC filed online: $50
- LLC filed on paper: $105
- Corporation: $58 for authorized shares valued at $30,000 or less, with an additional $5 for each extra $10,000 in authorized share value. No-par shares are assessed at $1 per share.6Missouri Secretary of State. Starting a Business
Online filings are processed significantly faster than mailed documents, with many handled immediately after submission. Paper filings are processed in the order received. Once approved, the Secretary of State issues a Certificate of Incorporation or Certificate of Organization. Keep it with your records; banks require it to open business accounts.
Step 2: File IRS Form 2553
With the entity formed, the S-corp election itself happens on IRS Form 2553. Every shareholder must sign it, which counts as unanimous consent to the election and pass-through treatment.7Internal Revenue Service. About Form 2553, Election by a Small Business Corporation
The deadline is tight. Form 2553 must be filed no later than two months and 15 days after the start of the tax year the election should cover, or at any point during the previous tax year.8Office of the Law Revision Counsel. 26 USC 1362 – Election, Revocation, Termination For a new entity on a calendar year, that puts the deadline at March 15. Miss it, and the election usually will not take effect until the following tax year.
Missouri does not require a separate state-level election. The Department of Revenue recognizes the federal election automatically once the IRS approves Form 2553.
If You Missed the Deadline
Late filers may still qualify for relief under IRS Revenue Procedure 2013-30. The IRS will treat the election as timely if the entity intended S-corp status from the requested effective date, the only reason the election failed was not filing on time, there is reasonable cause for the delay, and the request is made within three years and 75 days of the intended effective date.9Internal Revenue Service. Revenue Procedure 2013-30 Every shareholder who held stock during the gap period must also have reported income consistently with S-corp treatment on their personal returns.
Step 3: Register With the Missouri Department of Revenue
Separately from the Secretary of State filing, a new business must register with the Missouri Department of Revenue to get its state tax identification numbers. You can submit Form 2643 (Missouri Tax Registration Application) or register online.10Missouri Department of Revenue. Form 2643 – Missouri Tax Registration Application This single registration covers employer withholding, sales tax, and use tax. If the S-corp has employees or sells taxable goods, this step is required to operate legally.
How an S Corp Saves on Taxes
The main reason Missouri owners pursue S-corp status is to reduce self-employment taxes. In a sole proprietorship or single-member LLC, the full net profit is subject to the 15.3% self-employment tax covering Social Security and Medicare. An S-corp splits an owner’s income into salary and distributions, and only the salary portion is hit with FICA.11Internal Revenue Service. Wage Compensation for S Corporation Officers
If an S-corp earns $200,000 in profit and the owner takes a $90,000 salary, FICA applies only to the $90,000. The other $110,000 still flows through to the personal return as ordinary income, but it avoids the 15.3% self-employment tax. Depending on income levels, that can save roughly $10,000 to $17,000 a year.
There is a catch. The IRS requires S-corp shareholders who work in the business to receive “reasonable compensation.” No formula defines what reasonable means. The IRS and courts weigh factors like training and experience, time devoted to the business, what comparable businesses pay for similar work, and the company’s dividend history.11Internal Revenue Service. Wage Compensation for S Corporation Officers A salary set unreasonably low to maximize distributions is the fastest way to draw an audit. When the IRS reclassifies distributions as wages, it comes with back taxes, penalties, and interest.
Missouri Annual Tax Return (MO-1120S)
Missouri does not tax S-corps at the entity level, but the business must file an informational return. Every S-corp that files federal Form 1120S and has either a Missouri-resident shareholder or Missouri-source income must file Missouri Form MO-1120S. The return is due by the 15th day of the fourth month after the tax year ends, or April 15 for calendar-year filers.12Missouri Department of Revenue. MO-1120S Instructions Attach a copy of the federal Form 1120S and all Schedule K-1s.
If the S-corp has nonresident shareholders who earn more than $1,200 in Missouri-source income from the business, the company must withhold Missouri income tax on their behalf and file Form MO-1NR. Nonresident shareholders can request an exemption by filing Form MO-3NR.
Ongoing Compliance
Missouri’s annual obligations depend on whether your underlying entity is a corporation or an LLC, and this is where owners frequently stumble.
Corporations
Missouri for-profit corporations must file an annual registration report with the Secretary of State during the anniversary month of incorporation. A corporation formed on or after July 1, 2003, must file its first report within 30 days of incorporation and every year after.13Missouri Revisor of Statutes. Missouri Code 351.120 – Annual Corporate Registration Report Required The fee is $20 online or $45 by paper.5Missouri Secretary of State. Schedule of Fees and Charges Late reports add a $15 penalty for every 30 days past due.14Missouri Secretary of State. General Services and Filings
Fail to file and the Secretary of State can administratively dissolve the corporation. Reinstatement is available under Missouri Revised Statutes § 351.488 but involves additional fees and paperwork.15Missouri Revisor of Statutes. Missouri Code 351.488 – Reinstatement After Administrative Dissolution Dissolution does not erase tax obligations. It strips the entity of its authority to operate and its standing to defend itself in court.
LLCs
Missouri does not require LLCs to file annual reports with the Secretary of State. This is a genuine advantage for LLC owners who elect S-corp treatment. There is no annual state filing fee and no risk of administrative dissolution for a missed report. The ongoing obligations are maintaining a registered agent, keeping Department of Revenue registrations current, and filing federal and state tax returns on time.
Ending the Election or Closing Down
S-corp status can end voluntarily or involuntarily. To revoke the election, shareholders holding more than 50% of the outstanding stock, both voting and non-voting, must consent. The corporation then sends a revocation statement to the IRS service center where it files its return, identifying the corporation, each consenting shareholder, and the effective date.16Internal Revenue Service. Revoking a Subchapter S Election A revocation effective on the first day of the current tax year must be filed by the 15th day of the third month of that year.
Closing the business is a two-track process. With the Secretary of State, a corporation files articles of dissolution, winds up its affairs by paying debts and distributing assets, and then files a request for termination. The entity does not legally end until the Secretary of State issues a certificate of termination.14Missouri Secretary of State. General Services and Filings On the tax side, close the Department of Revenue accounts by filing Form 126 (Registration Change Request) to shut down sales tax, employer withholding, and use tax accounts.17Missouri Department of Revenue. Form 126 – Registration Change Request File final federal and state returns. Skipping the Department of Revenue step is a common oversight that produces notices and penalties long after the owner thinks the business is finished.