Did a few minutes of research on this.
Someone at the IRS said you can't pay yourself as an employee yet & operate as an S-Corp until the 2553 form is approved.
Technically speaking, they are right.
Is that right, that wouldn't make sense since you can file up until March 15th, with an effective date of Jan 1st.
Must have been some clarity lacking in your communications with the IRS. So long as you get it mailed in by March 15th, and assuming line E on the 2553 has an effective date of 1/1/2021, I really don't see an issue here. Unless the IRS disapproves your request. (I've never even heard of that happening either!)
You will need a new EIN for the S-Corp though, since your business structure will change from what the IRS considers a disregarded entity, to an S-Corp. This is based on what I read at https://www.irs.gov/businesses/small-businesses-self-employed/do-you-need-a-new-ein
Do be aware of one important aspect of doing this.
If you want the IRS to treat your business "like an S-Corp" for tax purposes. Then your business must "act" like an S-Corp for all purposes. That means the business is subject to all the same laws at all levels, as any other S-Corp is required to follow. The important one for you, is that you are required to file the 1120-S Corporate Tax Return by March 15th every tax year. Late filing fees for an S-Corp are extremely steep too.
