Form5E: Wisconsin Election by an S Corporation Not to Be Treated as a Tax-Option Corporation (2024)
Wisconsin · Wisconsin DOR · Used for tax years 2024
Wisconsin Form 5E is used by a federal S corporation to elect not to be treated as a tax-option corporation for Wisconsin franchise or income tax purposes. It records the corporation’s information, the effective taxable year, and consenting shareholders’ ownership information and
Who files this form
A corporation that is an S corporation for federal income tax purposes uses Form 5E if it chooses not to be treated as a tax-option corporation for Wisconsin tax purposes.
The election requires consent from shareholders who hold more than 50% of the corporation’s shares on the day the election is made.
If the S corporation has a qualified Subchapter S subsidiary (QSub) for federal purposes, neither the S corporation nor the QSub may make this election.
What you'll need
Have the following information ready:
- The corporation’s name, address, federal employer identification number, and state and year of incorporation.
- The number of shareholders and the number of shares issued and outstanding.
- The beginning date of the taxable year for which the election will take effect.
- Each signing shareholder’s name, address, federal identifying number, number of shares owned, and stock acquisition date. If stock was acquired on multiple dates, use the most recent acquisition date.
Attach a schedule with the required information if you need additional space. The form requires the consenting shareholders’ signatures and an authorized corporate officer’s signature, title, and date.
How to file
- Fill in the corporation’s name and address and items A through E.
- Enter the required information for each shareholder signing the election. Obtain signatures from shareholders holding more than 50% of the shares.
- If the stock or its income is community property, both husband and wife must sign the consent. Wisconsin marital property is a form of community property.
- Have an authorized officer sign the form.
- Mail Form 5E to:
Wisconsin Department of Revenue
PO Box 8908
Madison WI 53708-8908
The election is completed by filing a Wisconsin franchise or income tax return consistent with the election. Use Wisconsin Form 4 or Form 6, as appropriate.
Common mistakes
- Electing when the corporation has a QSub. The instructions warn that neither an S corporation with a federal QSub nor the QSub may elect out of Wisconsin tax-option treatment.
- Overlooking Wisconsin income adjustments. Because the corporation will file federal Form 1120-S, special adjustments may be needed to determine Wisconsin net income properly.
Questions people ask
How long does the election last?
It applies to the taxable year selected and at least the next four taxable years, including for any successor corporation, unless it ends automatically because the corporation acquires a QSub.
Can the corporation withdraw the election?
Before filing its Wisconsin return, the corporation may send the Department of Revenue a withdrawal letter signed by shareholders holding more than 50% of its stock. The letter must be sent by the return’s due date, including extensions. If the return was already filed before that deadline, the corporation may withdraw by filing an amended Wisconsin Form 5S with a withdrawal request letter by the due date or extended due date. After that deadline passes, the election cannot be withdrawn.
How can the corporation revoke the election after five years?
After the five-year period, the corporation may revoke the election by filing Wisconsin Form 5R, Revocation of Election by an S Corporation Not to Be a Tax-Option Corporation.
What happens if the corporation acquires a QSub?
The election is automatically revoked for the taxable year in which the corporation acquires a federal QSub. Form 5R is not required. The corporation must use Wisconsin Form 5S to report its income and the QSub’s income.