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Form 5E Instructions

After the due date, or extended due date, for filing the

General Instructions

corporation’s Wisconsin franchise or income tax return has

Purpose of Form – A corporation that is an S corporation

passed, the “opt-out” election cannot be withdrawn, and it

for federal income tax purposes uses Form 5E to elect not

remains effective for the corporation and any successors

to be a tax-option corporation for Wisconsin tax purposes.

for at least the next 4 taxable years after the taxable year

to which the election first applies. After the 5-year period,

you may revoke the “opt-out” election by filing Wisconsin

How to Elect – The election not to be a tax-option cor-

Form 5R, Revocation of Election by an S Corporation Not

poration for Wisconsin requires the consent of persons

to Be a Tax-Option Corporation.

who hold more than 50% of the shares of the tax-option

(S) corporation on the day the election is made. Note: If

an S corporation has a qualified Subchapter S subsidiary

Exception: The “opt-out” election is automatically revoked

(QSub) for federal purposes, neither the S corporation

for the taxable year in which a federal S corporation ac-

nor the QSub may elect out of Wisconsin tax-option (S)

quires a QSub. In this case, it is not necessary to file Form

treatment.

5R. You must use Wisconsin Form 5S to report the income

of the corporation and its QSub.

When to Elect – You must make the election on or before

the due date, or extended due date, of the first Wisconsin

corporation franchise or income tax return affected by the

Specific Instructions

election. The election is completed by the filing of a Wiscon-

sin franchise or income tax return in accordance with the

Fill in the corporation’s name and address and enter the

election. Use Wisconsin Form 4 or Form 5, as appropriate.

appropriate information in items A through E.

Caution: Since the corporation will be filing federal Form

1120S, special adjustments may be required to properly

Enter in the space provided the name, address, and federal

determine Wisconsin net income.

identifying number (social security number for individuals

and federal employer identification number for estates,

Revoking the Election – You may withdraw the “opt-

qualified trusts, and exempt organizations) of each share-

out” election prior to the date of filing the corporation’s

holder who is signing the election. Also enter for each

Wisconsin franchise or income tax return by sending a

shareholder the number of shares owned and the date

letter, signed by shareholders holding more than 50% of

the stock was acquired. If the shareholder acquired stock

the corporation’s stock, to the Department of Revenue on

on more than one date, enter the last date on which that

or before the due date, including extensions, of the corpo-

shareholder acquired stock. Each shareholder must sign

ration’s return. If the corporation’s return was filed before

in the space indicated. If the stock is held as community

the due date, or extended due date, you may withdraw

property or if the income from the stock is community

the election by filing an amended Wisconsin franchise or

property, the consent must be signed by both husband

income tax return, Form 5S, along with a letter requesting

and wife. Wisconsin’s marital property is a form of com-

the withdrawal of the “opt-out” election on or before the

munity property.

due date or extended due date.

If you need additional space, attach a schedule containing

the required information.

An authorized officer of the corporation must sign this form

in the space provided.

Form 5e - Wisconsin Election By An S Corporation Not To Be Treated As A Tax-Option Corporation Page 2

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