2023 Corporate Tax Rate
The 2023 Corporate Tax Rate is 21%.
Effective 2023-01-01Source: 2023 Instructions for Form 1120 (IRS)Verified 2026-08-29
Compared with 2022
Every figure on this page is unchanged from 2022.
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Rate | 21% | 21% | +0% (+0.0%) |
Who it applies to
All domestic C corporations filing Form 1120, U.S. Corporation Income Tax Return, for the 2023 tax year.
What changed this year, and why
The 2023 federal corporate income tax rate is set at a flat 21% of taxable income, as reported on Schedule J of IRS Form 1120.
Common questions
- What is the corporate tax rate for 2023?
- The federal corporate income tax rate for 2023 is a flat 21% of taxable income. There are no graduated brackets.
- How is the tax calculated on Form 1120?
- On Schedule J (Tax Computation), a corporation multiplies its taxable income by 21% to determine its tax liability.
Which entities pay this rate, including an LLC that elects it
An LLC with two or more owners is treated as a partnership by default and files Form 1065. A single-member LLC is disregarded and reports on its owner's return. However, either type of LLC can choose to be taxed as a corporation by filing Form 8832 (Entity Classification Election) and then filing Form 1120. Once that election is in place, the LLC pays corporate tax at the 21% rate and follows all other corporate filing rules for the year of the election and beyond.
Limited liability companies (LLC). If an entity with more than one owner was formed as an LLC under state law, it is generally treated as a partnership for federal income tax purposes and files Form 1065, U.S. Return of Partnership Income. Generally, a single-member LLC is disregarded as an entity separate from its owner and reports its income and deductions on its owner's federal income tax return. 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.
2023 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)
The filing deadline, and the extension
A corporation’s income tax return is due by the 15th day of the fourth month after its tax year ends - April 15 for a calendar-year filer. A fiscal year ending June 30 moves the deadline to the 15th day of the third month. If the due date falls on a Saturday, Sunday, or legal holiday, the return can be filed the next business day. A corporation that needs more time files Form 7004 by the regular due date to receive an automatic extension of time to file. The extension gives more time to submit the return but not more time to pay; any tax owed is still due by the original deadline and interest accrues on unpaid amounts.
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 Instructions for Form 1120 3 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.
2023 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)
Corporations pay the tax in four installments
Generally, the following rules apply to the corporation's payments of estimated tax. 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. The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next regular business day. The corporation must use electronic funds transfer to make installment payments of estimated tax. These four quarterly payments ensure the corporation pays its tax liability throughout the year rather than in one lump sum at filing time.
Estimated Tax Payments Generally, the following rules apply to the corporation's payments of estimated tax. • 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. • The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year. If any date falls on a Saturday, Sunday, or legal holiday, the installment is due on the next regular business day. • The corporation must use electronic funds transfer to make installment payments of estimated tax.
2023 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 in fields such as accounting, actuarial science, architecture, consulting, engineering, health, law, and the performing arts. The services must be substantially performed by employee-owners. While personal service corporations have special rules regarding their tax year (generally requiring a calendar year), they pay tax at the same corporate rate as other corporations. On Schedule J, line 1, taxable income is multiplied by 21% to compute the tax. This flat rate applies to all corporations filing Form 1120, including personal service corporations.
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.
2023 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. For tax returns required to be filed in 2024, the minimum penalty for a return that is more than 60 days late is the smaller of the tax due or $485. The penalty will not be imposed if the corporation can show that the failure to file on time was due to reasonable cause. This penalty applies in addition to any interest charges on unpaid tax.
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 2024 that is more than 60 days late is the smaller of the tax due or $485. The penalty will not be imposed if the corporation can show that the failure to file on time was due to reasonable cause.
2023 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.
2023 Instructions for Form 1120 (IRS)
- Rate
Multiply taxable income (page 1, line 30) by 21% (0.21).