An S corp is a corporation under the law of the state where it is structured. The income, deductions, and tax credits of an S corp flow through to shareholders annually, regardless of whether distributions are made. The S corp election must usually be made by the 15th day of the 3rd month of the tax year when the election is meant to be effective, or at any time during the year immediately following the tax year. Congress however, has directed the IRS to show leniency with regard to late S corp elections. The IRS will usually accept a late S corp elections, however, you may want to consult with a qualified attorney.