Many business owners elect S-corporation tax status to reduce self-employment taxes and optimize compensation. But circumstances change—income fluctuates, payroll becomes burdensome, or a simpler tax structure makes more sense.
If your LLC elected to be taxed as an S-corporation and you now want to revert back to single-member LLC (disregarded entity) tax treatment, you're not alone. This question comes up frequently at our firm.

The good news: revoking an S-corp election is entirely permissible.
The better news (for Louisiana businesses): the state of Louisiana does not require its own revocation form.

Below is a clear guide on what steps are required, when the revocation can take effect, and what Louisiana business owners must file when making this change.

What Is an S-Corporation Election?

A limited liability company (LLC) can choose how it wants to be taxed. By default:

• A single-member LLC is treated as a disregarded entity, and income is reported on Schedule C of the owner's tax return.

• A multi-member LLC is treated as a partnership.

But by filing IRS Form 2553, an LLC can elect to be taxed as an S-corporation—a pass-through entity with potentially favorable payroll tax treatment.

If your LLC elected S-corp status in 2025, for example, it is treated as an S-corp for federal tax purposes beginning January 1, 2025 (assuming a calendar year).

How to Revoke an S-Corporation Election

Revoking the S-election is simpler than most business owners expect. There is no special IRS form for revocations. Instead, the IRS requires a written revocation statement submitted to the same service center where the business files its S-corporation tax return.

The revocation statement must include:

• LLC's legal name and EIN

• A declaration that the company is revoking its S-corporation election under IRC § 1362(a)

• The effective date of revocation

• The original effective date of the S-election

• A signature by the member authorized to sign tax returns

For single-member LLCs, no additional shareholder consent is required.

When Can You Revoke the S-Election?

This is the timing rule most business owners care about:

If the S-election is effective in 2025:

• If you file the revocation on or before March 15, 2025, you may revoke the election effective January 1, 2025.

• If you file after March 15, the revocation is effective January 1, 2026, unless you specify a later prospective date (for example, July 1, 2025).

This timing is important because S-corps require payroll, reasonable compensation, and more complex accounting. Choosing the right effective date can avoid unnecessary payroll administration or unwanted short-year returns.

Don't Forget: File Form 8832

Revoking the S-election does not automatically restore disregarded-entity status.

If you revoke without further action, the LLC may default to C-corporation tax classification—an unpleasant surprise for many business owners.

To ensure the LLC goes back to being taxed as a disregarded entity, you should also file:

IRS Form 8832 — Entity Classification Election

On this form, you elect:

“Disregarded entity (an eligible entity with a single owner)”

and set the date to match the date you are revoking the S-election.

What Louisiana Requires

Here's where many Louisiana business owners get confused:
Louisiana does not have its own S-corp election or revocation.

Louisiana simply follows federal tax classification.

This means:

No Louisiana form is required to revoke an S-corp election.

However, you may have Louisiana filing consequences based on the timing of the change:

1. You may need to file a short-year Louisiana S-corp return.

If the S-corp election ends mid-year, the business must file a short-period corporate return (Form CIFT-620) for the S-corp portion of the year.

2. After revocation, file the correct state return.

• If the LLC becomes a disregarded entity, no Louisiana corporate income/franchise tax return is required.

• If the LLC inadvertently becomes a C-corporation, Louisiana will expect continued CIFT-620 filings.

3. Update state tax accounts if necessary.

Through LaTAP, you can update return types or close accounts associated with corporate filing status.

Common Reasons LLC Owners Revoke Their S-Corp Status

From our firm's experience advising small business owners, the top reasons include:

• Income no longer supports payroll + distributions

• Administrative burden is too high

• Owner prefers Schedule C simplicity

• Business profits became inconsistent year-to-year

• A change in ownership structure

• A shift in long-term tax strategy

Whatever the reason, the key is coordinating the revocation date with your CPA so payroll, accounting, and year-end tax filing remain smooth.

Key Takeaways

• Revoking an S-corp election is allowed and relatively straightforward.

• File a revocation statement with the IRS and Form 8832 to re-elect disregarded-entity status.

• If your S-election was effective in 2025, the earliest it can be revoked is January 1, 2025, if filed by March 15, 2025.

• Louisiana requires no separate revocation form and simply follows federal tax classification.

• Coordinate with your CPA to avoid payroll issues and to properly file any short-year returns.

Need Help Navigating This Change?

At Business Law Group, we regularly assist business owners who are rethinking their tax classification. If you'd like us to prepare the revocation statement, Form 8832, and guide you through the Louisiana filing consequences, we're happy to help.