How to Change an LLC to an S Corp in Virginia?

Changing your LLC to an S corporation in Virginia doesn’t require forming a new entity. Instead, it’s a tax classification change with the IRS while your legal structure as an LLC remains the same.

Here’s how to convert your Virginia LLC to an S corp for tax purposes:

Step 1: Ensure Eligibility for S Corp Election

To qualify for S Corporation status, your LLC must:

• Be a domestic entity
• Have no more than 100 shareholders
• Have only one class of stock
• Shareholders must be U.S. citizens or residents
• Not be an ineligible corporation (e.g., financial institutions, insurance companies)

Step 2: Obtain an EIN (if you haven’t already)

You’ll need a valid Employer Identification Number (EIN).

• If your LLC already has one, you don’t need to reapply
• Apply via IRS.gov if needed

Step 3: File IRS Form 2553

• Submit Form 2553 – Election by a Small Business Corporation
• Must be filed within 75 days of the start of the tax year you want S corp treatment
• Can be filed electronically or by mail to the IRS

Step 4: Update Virginia Tax Accounts (if applicable)

Once the IRS approves your S corp election:

• Contact the Virginia Department of Taxation to adjust your state tax treatment if needed
• You may need to update payroll or withholding information

Step 5: Maintain Proper Recordkeeping

Although your LLC remains legally unchanged, your tax filings, payroll, and distributions will now follow S corp rules.

• Consider consulting a CPA to manage reasonable salary requirements and distributions under the IRS rules

Changing from an LLC to an S corp in Virginia might lower your self-employment taxes if you do it the right way. For simple handling and good advice, work with One IBC USA, your reliable provider for business stuff and tax help.