119th (2025–2027)
H.R. 2777
The S-Corporation Additional Participation Act of 2025 would increase the maximum number of shareholders allowed in an S corporation from 100 to 250. S corporations are a common business structure that allows owners to avoid double taxation by passing income directly to shareholders' personal tax returns. This change would affect small and mid-sized businesses looking to bring in more investors or add new partners without losing their S corporation tax status. The bill would take effect for tax years beginning after December 31, 2025. The legislation does not specify any direct federal funding and simply amends the existing tax code to expand eligibility requirements for this business structure.