Corporate Tax Rate 2026
Current year
The 2026 Corporate Tax Rate is 21%.
Effective 2026-01-01Source: Publication 542 (Rev. January 2024), Corporations (IRS)Verified 2026-08-29
Compared with 2025
Every figure on this page is unchanged from 2025.
| Item | 2025 | 2026 | Change |
|---|---|---|---|
| Rate | 21% | 21% | +0% (+0.0%) |
Who it applies to
The 21% is the corporation's own tax on its own taxable income, charged before anything the corporation then distributes is taxed again on a shareholder's return. Publication 542 applies it to ordinary domestic corporations and, in the same sentence, to qualified personal service corporations, which are corporations whose work is substantially the performance of personal services in fields such as accounting, actuarial science, architecture, consulting, engineering, health, law and the performing arts, and whose employee-owners hold most of the stock. It is not what an S corporation pays, since an S corporation generally passes its income through to its shareholders, and a partnership or a limited liability company reaches this rate only if it is classified as a corporation for tax purposes. A corporation that is a member of a controlled group multiplies by the same 21% but must also complete Schedule O (Form 1120) to report how certain tax benefits are apportioned among the members.
What changed this year, and why
Nothing changed for 2026. The federal corporate income tax is a single flat rate of 21%, and Publication 542, the IRS's guide for ordinary domestic corporations, states it as a standing rule rather than as a figure for one year: corporations, including qualified personal service corporations, figure their tax by multiplying taxable income by 21%. The rate is written into the statute at that figure and carries no inflation adjustment, so it does not move from year to year the way the individual brackets, the standard deduction and the payroll wage bases do. There is no bracket schedule behind it either, so a corporation with small taxable income is charged the same rate on it as one with large taxable income.
Common questions
- What is the corporate tax rate for 2026?
- 21%. Publication 542 says corporations, including qualified personal service corporations, figure their tax by multiplying taxable income by 21%. It is a flat rate rather than a bracket schedule, so there is no lower band on the first slice of taxable income.
- Did the corporate rate change from 2025?
- No. It was 21% for 2025 and it is 21% for 2026. The rate is set in the statute and is not one of the figures the IRS adjusts for inflation each autumn, so it stays where it is until Congress moves it.
- Do personal service corporations pay more than 21%?
- No. Publication 542 names qualified personal service corporations in the same sentence as every other corporation: they figure their tax by multiplying taxable income by 21%. Personal service corporations do face separate rules elsewhere, including on accounting periods and on the at-risk and passive activity limits, but not a different rate.
- Is 21% the whole of a corporation's federal tax?
- Not always. Publication 542 describes a base erosion minimum tax that may apply to a corporation with large gross receipts in the preceding tax years, reported on Form 8991, and a corporate alternative minimum tax on the adjusted financial statement income of an applicable corporation, determined on Form 4626. A corporation that lets earnings accumulate beyond the reasonable needs of the business may also owe an accumulated earnings tax at its own rate. Running the other way, allowable credits such as the foreign tax credit and the general business credit reduce what is owed.
- Does the 21% apply to an S corporation or an LLC?
- Only to a business that is taxed as a corporation. An S corporation generally passes its income through to its shareholders, who report it on their own returns, and a limited liability company or a partnership is taxed as a corporation only if it is classified as one. Publication 542 is written for ordinary domestic corporations that file a corporate income tax return.
- Where does the rate get applied on the return?
- On Form 1120, where the corporation multiplies its taxable income by 21% and enters the result as its income tax before credits. Publication 542 points to the Instructions for Form 1120, or to the instructions for the applicable corporation's return, for changes that may affect the current tax year.
Every amount on this page is a published figure rather than yours. The Corporate income tax calculator takes the number you enter and works it out against them, showing which published figure it used.
Which entities pay this rate, including an LLC that elects it
An LLC with more than one owner is generally treated as a partnership for federal income tax purposes and files Form 1065. A single-member LLC is generally disregarded as an entity separate from its owner and reports its income and deductions on the owner's federal income tax return. However, the LLC can file a Form 1120 only if it has filed Form 8832 to elect to be treated as an association taxable as a corporation. Once an LLC makes this election to be taxed as a corporation, it is subject to the corporate tax rate of 21% for 2026. For more information about LLCs, see Pub. 3402, Taxation of Limited Liability Companies.
The LLC can file a Form 1120 only if it has filed Form 8832 to elect to be treated as an association taxable as a corporation.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)
The filing deadline, and the extension
Generally, a corporation must file its income tax return by the 15th day of the 4th month after the end of its tax year. A new corporation filing a short-period return must generally file by the 15th day of the 4th month after the short period ends. A corporation that has dissolved must generally file by the 15th day of the 4th month after the date it dissolved. However, a corporation with a fiscal tax year ending June 30 must file by the 15th day of the 3rd month after the end of its tax year. If the due date falls on a Saturday, Sunday, or legal holiday, the corporation can file on the next business day. A corporation may request an automatic extension of time to file by filing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns. Generally, the corporation must file Form 7004 by the regular due date of the return. Note that even if an extension is granted, any tax owed must still be paid by the original due date to avoid penalties and interest.
When To File Generally, a corporation must file its income tax return by the 15th day of the 4th month after the end of its tax year. A new corporation filing a short-period return must generally file by the 15th day of the 4th month after the short period ends. A corporation that has dissolved must generally file by the 15th day of the 4th month after the date it dissolved. However, a corporation with a fiscal tax year ending June 30 must file by the 15th day of the 3rd month after the end of its tax year. A corporation with a short tax year ending anytime in June will be treated as if the short year ended on June 30, and must file by the 15th day of the 3rd month after the end of its tax year. If the due date falls on a Saturday, Sunday, or legal holiday, the corporation can file on the next business day.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)
Corporations pay the tax in four installments
Corporations must make installment payments of estimated tax if they expect their total tax for the year (less applicable credits) to be $500 or more. The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. This means corporations typically make four estimated tax payments throughout the year, spreading their tax liability across quarterly deadlines rather than paying everything at once when filing their return. If any installment due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next business day. Corporations must carefully estimate their tax liability to determine if they meet the $500 threshold and calculate appropriate installment amounts. Failure to pay sufficient estimated tax during the year may result in penalties, even if the corporation receives a refund when filing its annual return. Corporations can use Form 2220 to determine if they owe an estimated tax penalty and to figure the amount.
The corporation must make installment payments of estimated tax if it expects its total tax for the year (less applicable credits) to be $500 or more.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)
Personal service corporations pay at the same rate
A personal service corporation is a corporation whose principal activity for the testing period is the performance of personal services. The testing period for a tax year is generally the prior tax year unless the corporation has just been formed. Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health, law, and the performing arts. The services must be substantially performed by employee-owners. Personal service corporations are subject to the same 21% corporate tax rate that applies to other C corporations filing Form 1120. There is no special or higher rate for personal service corporations - the taxable income is multiplied by 21% to determine the income tax liability. Personal service corporations must also check Item A, box 3 on their return to indicate their status. These corporations face additional requirements, including generally using a calendar tax year unless they qualify for specific exceptions or obtain IRS approval for a different tax year.
If the corporation is a personal service corporation, check Item A, box 3. A personal service corporation is a corporation whose principal activity for the testing period is the performance of personal services. The testing period for a tax year is generally the prior tax year unless the corporation has just been formed. Personal services include any activity performed in the fields of accounting, actuarial science, architecture, consulting, engineering, health, law, and the performing arts. The services must be substantially performed by employee-owners.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)
What filing late costs
A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. This penalty accumulates quickly - a return that is five months or more late will hit the maximum penalty of 25% of the unpaid tax. For tax returns required to be filed in 2026, if the return is more than 60 days late, there is a minimum penalty of the smaller of the tax due or $525. This means that even if the 5% per month calculation would result in a smaller amount, the corporation will owe at least $525 (or the full tax due if that is less than $525) when the return is filed more than 60 days after the deadline. The penalty will not be imposed if the corporation can show that the failure to file on time was due to reasonable cause. Interest is also charged on any unpaid tax and penalties from the due date (including extensions) to the date of payment.
Late filing of return. A corporation that does not file its tax return by the due date, including extensions, may be penalized 5% of the unpaid tax for each month or part of a month the return is late, up to a maximum of 25% of the unpaid tax. The minimum penalty for a tax return required to be filed in 2026 that is more than 60 days late is the smaller of the tax due or $525. The penalty will not be imposed if the corporation can show that the failure to file on time was due to reasonable cause.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Publication 542 (Rev. January 2024), Corporations (IRS)
- Rate
Corporations, including qualified personal service corpo- rations, figure their tax by multiplying taxable income by 21% (0.21).
By year
Every published year
9 years on record, 2026 back to 2018. Each year links to its own page, its own document and its own verification date.