Qualified Subchapter S Subsidiary Applicants

A Qualified Subchapter S Subsidiary (Q-Sub) is a domestic corporation whose stock is 100% owned by its parent S corporation.

IRC 1361 permits S Corporations to elect to own a qualified Subchapter S subsidiary. Form 8869, Qualified Subchapter S Subsidiary Election, is used to make this election.

When the IRS accepts a Q-Sub election, the Qualified Subchapter S Subsidiary is deemed liquidated into the parent S Corporation. If the Q-Sub was a separate corporation, it is no longer treated as such. The Q-Sub is a disregarded entity upon acceptance of the election and is not treated as a subsidiary of a corporation. It is not recognized as a separate entity.

Approved Form 8869, Qualified Subchapter S Subsidiary Election, will have a transaction code 082 on the entity module.

Q-Sub Form 8802, Application for United States Residency Certification must include:

Application Information (the Q-Sub information)

Applicant's TIN, EIN of the Q-Sub (if applicable)

Mailing Address (if other than applicant's address)

TIA (if applicable)

Permanent Residence Address (when applicable)

Parent S Corporation, Entity information must be entered in Applicant Entity field.

Parent S Corporation's EIN (Enter this EIN in the Primary TIN field when entering Form 8802 in the United States Residency Certification (USRC) Database.)

Entity Type

Tax Form filed by parent organization

Requested certification year (the year the applicant wants printed on the Form 6166)

Tax period

Certification Type

Country and number of certifications requested

Penalties of Perjury statements (when applicable)

A signature, title and date

Acceptable proof of an approved 8869 election

A list of the shareholders within the Parent S Corporation for which certification is requested and written authorization (Form 2848 or Form 8821) from each individual shareholder authorizing the release of their individual tax information

Authorization from a corporate officer or the corporation's POA to release the corporate tax information, when the certification is being released to someone other than a corporate officer, POA, or shareholder in the S Corporation

When the Q-Sub application is complete and includes acceptable proof of its Q-Sub status:

Enter the Parent S Corporation's TIN in the primary TIN field.

Enter the Q-Sub TIN in the Secondary TIN field.

Enter the Q-Sub's entity information in the Applicant Information field.

Enter the Q-Sub's parent's name control in the Name Control field.

Enter all other required information.