Form 8716 - Election To Have A Tax Year Other Than A Required Tax Year Page 2
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Form 8716 (Rev. 12-2013)
Page
Specific Instructions
Also file a copy of Form 8716 with your income tax return for
the first tax year for which the election is made. To enable
electronic filing, you may file an unsigned Form 8716 containing
Line 1
the same information as on the signed Form 8716 you filed
separately.
Check the applicable box to indicate whether the entity is
classified for federal income tax purposes as a partnership, an
Effect of Section 444 Election
S corporation (or a C corporation electing to be an
S corporation), or a PSC.
Partnerships and S corporations. An electing partnership or
A corporation electing to be an S corporation that wants to
S corporation must file Form 8752, Required Payment or Refund
make a section 444 election is not required to attach a copy of
Under Section 7519, for each year the election is in effect. Form
8752 is used to figure and make the payment required under
Form 8716 to its Form 2553, Election by a Small Business
Corporation. However, the corporation is required to state on
section 7519 or to obtain a refund of net prior year payments.
Form 2553 its intention to make a section 444 election (or a
File Form 8752 by May 15 following the calendar year in which
backup section 444 election). If a corporation is making a
each applicable election year begins.
backup section 444 election (provided for in Part II, item Q, of
The section 444 election will end if the partnership or
Form 2553), it must type or print the words “Backup Election” at
S corporation willfully fails to comply with the requirements of
the top of the Form 8716 it files. See Temporary Regulations
section 7519.
section 1.444-3T for more details.
Personal service corporations (PSC). An electing PSC should
Line 2
not file Form 8752. Instead, it must comply with the minimum
distribution requirements (see next paragraph) of section 280H
Enter the name and telephone number (including the area code)
for each year the election is in effect. If the PSC does not meet
of a person that the IRS may call for information needed to
these requirements, the applicable amounts it may deduct for
complete the processing of the election.
payments made to its employee-owners may be limited.
Line 4
Use Schedule H (Form 1120), Section 280H Limitations for a
Personal Service Corporation (PSC), to figure the required
Required tax year. The required tax year for an S corporation
minimum distribution and the maximum deductible amount.
or PSC is a calendar year. Generally, the required tax year for a
Attach Schedule H to the income tax return of the PSC for each
partnership is the tax year of a majority of its partners (see
tax year the PSC does not meet the minimum distribution
Regulations section 1.706-1(b) for details).
requirements.
Line 5
The section 444 election will end if the PSC is penalized for
willfully failing to comply with the requirements of section 280H.
The following limitations and special rules apply in determining
Members of Certain Tiered Structures May
the tax year an entity may elect.
Not Make Election
New entity adopting a tax year. An entity adopting a tax year
may elect a tax year under section 444 only if the deferral period
No election may be made under section 444(a) by an entity that
of the tax year is not more than 3 months. See Deferral period
is part of a tiered structure other than a tiered structure that
below.
consists entirely of partnerships and/or S corporations all of
Existing entity retaining a tax year. In certain cases, an entity
which have the same tax year. An election previously made will
may elect to retain its tax year if the deferral period is not more
be terminated if an entity later becomes part of a tiered
than 3 months. If the entity does not want to elect to retain its
structure that is not allowed to make the election. See
tax year, it may elect to change its tax year as explained below.
Temporary Regulations section 1.444-2T for other details.
Existing entity changing a tax year. An existing entity may
Acceptance of Election
elect to change its tax year if the deferral period of the elected
tax year is not more than the shorter of 3 months or the deferral
After your election is received and accepted by the service
period of the tax year being changed. If the tax year being
center, the center will stamp it “Accepted” and return a copy to
changed is the entity’s required tax year, the deferral period for
you. Be sure to keep a copy of the form marked “Accepted” for
that year is zero and the entity is not permitted to make a
your records.
section 444 election.
End of Election
Example. ABC, a C corporation that historically used a tax
year ending October 31, elects S status and wants to make a
The election is made only once. It remains in effect until the
section 444 election for its tax year beginning November 1.
entity changes its accounting period to its required tax year or
ABC’s required tax year under section 1378 is a calendar tax
some other permitted year or it is penalized for willfully failing to
year. In this case, the deferral period of the tax year being
comply with the requirements of section 280H or 7519. If the
changed is 2 months. Thus, ABC may elect to retain its tax year
election is terminated, the entity may not make another section
beginning November 1 and ending October 31 or elect a tax
444 election.
year beginning on December 1 (with a deferral period of one
month). However, it may not elect a tax year beginning October
Signature
1 because the 3-month deferral period would be longer than the
2-month deferral period of the tax year being changed. If ABC
Form 8716 is not a valid election unless it is signed. For
elects a tax year beginning on December 1, it must file a short
partnerships, a general partner or a limited liability company
tax year return beginning November 1 and ending November 30.
member manager must sign and date the election.
Deferral period. The term “deferral period” means the number
For corporations, the election must be signed and dated by
of months between the last day of the elected tax year and the
the president, vice president, treasurer, assistant treasurer, chief
last day of the required tax year. For example, if you elected a
accounting officer, or any other corporate officer (such as tax
tax year that ends on September 30 and your required tax year
officer) authorized to sign its tax return.
is the calendar year, the deferral period would be 3 months (the
If a receiver, trustee in bankruptcy, or assignee controls the
number of months between September 30 and December 31).
entity’s property or business, that person must sign the election.
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