Extension of time for making S corporation elections

(a) In general Section 1362(b) of the Internal Revenue Code of 1986 is amended to read as follows: (b) When made (1) In general An election under subsection (a) may be made by a small business corporation for any taxable year not later than the due date for filing the return of the S corporation for such taxable year (including extensions). (2) Certain elections treated as made for next taxable year If— (A) an election under subsection (a) is made for any taxable year within the period described in paragraph (1), but (B) either— (i) on 1 or more days in such taxable year and before the day on which the election was made the corporation did not meet the requirements of subsection (b) of section 1361, or (ii) 1 or more of the persons who held stock in the corporation during such taxable year and before the election was made did not consent to the election, then such election shall be treated as made for the following taxable year. (3) Authority to treat late elections, etc., as timely If— (A) an election under subsection (a) is made for any taxable year after the date prescribed by this subsection for making such election for such taxable year or no such election is made for any taxable year, and (B) the Secretary determines that there was reasonable cause for the failure to timely make such election, the Secretary may treat such an election as timely made for such taxable year. (4) Election on timely filed returns Except as otherwise provided by the Secretary, an election under subsection (a) for any taxable year may be made on a timely filed return of the S corporation for such taxable year. (5) Secretarial authority The Secretary may prescribe such regulations, rules, or other guidance as may be necessary or appropriate for purposes of applying this subsection.. (b) Coordination with certain other provisions (1) Qualified subchapter S subsidiaries Section 1361(b)(3)(B) of such Code is amended by adding at the end the following flush sentence: Rules similar to the rules of section 1362(b) shall apply with respect to any election under clause (ii).. (2) Qualified subchapter S trusts Section 1361(d)(2) of such Code is amended by striking subparagraph (D). (c) Revocations Section 1362(d)(1) of such Code is amended— (1) by striking subparagraph (D) in subparagraph (C) and inserting subparagraphs (D) and (E), and (2) by adding at the end the following new subparagraph: (E) Authority to treat late revocations as timely If— (i) a revocation under subparagraph (A) is made for any taxable year after the date prescribed by this paragraph for making such revocation for such taxable year or no such revocation is made for any taxable year, and (ii) the Secretary determines that there was reasonable cause for the failure to timely make such revocation, the Secretary may treat such a revocation as timely made for such taxable year.. (d) Effective date (1) In general Except as otherwise provided in this subsection, the amendments made by this section shall apply to elections for taxable years beginning after December 31, 2025. (2) Revocations The amendments made by subsection (c) shall apply to revocations made after the date of the enactment of this Act.