This legislation proposes to amend the Internal Revenue Code of 1986, specifically targeting the eligibility requirements for S corporations. The primary change is an increase in the maximum number of shareholders an S corporation can have, moving from the current limit of 100 shareholders to 250 shareholders . This expansion aims to allow more businesses to qualify for or maintain their S corporation status, potentially offering tax and operational benefits. The amendment will take effect for all taxable years beginning after December 31, 2025 , providing a clear implementation timeline for affected entities.