S Corp Previouly taxed income

[JON]

I have a S Corp where current year distributions wipe out previous year's and current year UTI!! So there is Previously Taxed Income - which is Retained Earnings from when it was a C Corp. My confusion is there has to be an election before that can be distributed as a dividend, but I think once the UTI is gone it is automatic that excess distributions are from PTI and it is a dividend to the stockholder.

Am I right??

[JON]

S Corp UNDISTRIBUTEDPreviously TAXED iNCOME

I should have had "undistributed" in the title. Income when it comes out is it not automatically drawn if S Corp UTI is down to 0? Or is an election needed??