An S corporation generally does not pay income taxes at the corporate level; instead, it becomes a pass-through entity that funnels the income or loss, credits, etc., through to the shareholder(s). For a corporation to become an S-corporation, it must elect that status as described below.

Certain entities other than a corporation may elect to be treated for tax purposes as a corporation by filing Form 8332, Entity Classification Election, to make the so-called “check the box” election. If that entity wants S corporation status, it may instead use Form 2553 (discussed below) rather than Form 8332.