Mary and Paul are plumbers. They went into business together and decided that the corporation structure would be in their best interest. On January 1, 2019, they formed the M & P Corp. They did not file a Form 2553. Mary and Paul filed an 1120S return at the end of the year and paid self-employment tax on their respective shares of the income. All of the following statements are true except
A. They are not permitted to file an 1120S return because they have not made a valid election.
B. The income distributed by a corporation is not subject to self-employment tax.
C. Mary and Paul have until March 15, 2020, to make a valid election for 2019.
D. Both Mary and Paul must sign Form 2553 to make a valid election.
Answer (C) is correct.