Form 8869, Qualified Subchapter S Subsidiary Election
Form 8869 is how a parent S corporation elects to treat an eligible subsidiary as a qualified subchapter S subsidiary, or QSub. Fill in the official IRS PDF below and download it.
This is the genuine IRS PDF, unmodified. Source: IRS official page.
What is 8869?
Form 8869, Qualified Subchapter S Subsidiary Election, lets a parent S corporation elect to treat one or more wholly owned eligible subsidiaries as QSubs. Once the election is in effect, the subsidiary is generally treated as a deemed liquidation into the parent: it stops being a separate corporation for federal tax purposes, and its assets, liabilities, income, deductions, and credits are treated as the parent’s.
The subsidiary must be a domestic corporation that would qualify as an S corporation if its stock were held directly by the parent’s shareholders, and the parent must own 100 percent of its stock. The election keeps the legal entity structure intact while consolidating everything into the parent’s S corporation return.
Who files 8869?
- Parent S corporations electing QSub treatment for a wholly owned domestic subsidiary
- S corporations acquiring a corporation and wanting it folded into the parent’s return
- Banks and other businesses restructuring under an S corporation holding company
- S corporations making elections for multiple subsidiaries, one Form 8869 per subsidiary
How to fill out 8869
- Enter the parent S corporation’s name, EIN, address, and the date its S election took effect in Part I.
- Enter the subsidiary’s name, EIN if it has one, address, and date and state of incorporation in Part II.
- Enter the date you want the QSub election to take effect, keeping within the timing window described in the instructions.
- Have an officer of the parent corporation sign and date the form.
- Download the finished PDF and mail or fax it to the IRS service center listed in the instructions. It is not attached to a tax return.
Quick fill 8869 on this page
Prefer to see the form itself while you type? Open 8869 in the editor to fill it on the actual pages, add a signature, and download.
Frequently asked questions
When can the QSub election take effect?
The effective date generally cannot be more than 2 months and 15 days before the form is filed, or more than 12 months after. Elections outside that window take effect according to the rules in the instructions, and relief for late elections may be available.
Does the QSub file its own tax return?
No. While the election is in effect the subsidiary’s activity is reported on the parent S corporation’s Form 1120-S. The subsidiary may still have separate filing duties for some employment and excise taxes, so check the current rules.
What happens if the parent sells part of the QSub’s stock?
The election terminates if the parent stops owning 100 percent of the stock, and the subsidiary is generally treated as a new corporation from that point. The consequences can be significant, so plan any transfer carefully.