What is the federal corporate income tax rate for 2025?

It is 21%, applied as a single flat rate to a corporation's taxable income. The Instructions for Form 1120 put the calculation on Schedule J, line 1a: take taxable income from the face of the return and multiply it by 21%. There is no graduated schedule of brackets behind that figure, so the same 21% applies to the first slice of taxable income and to the last, no matter how large the corporation is.

Is the corporate tax rate flat or graduated?

Flat. The tax computation in the Instructions for Form 1120 is a single multiplication rather than a bracket table: taxable income times 21%, entered on Schedule J, line 1a. Other lines of Schedule J can add to the chapter 1 tax, such as tax from Form 1120-L for a mutual savings bank conducting a life insurance business, section 1291 tax from Form 8621, and a tax adjustment from Form 8978. None of those lines changes the 21% rate itself.

Which corporations have to file Form 1120?

Unless it is exempt under section 501, every domestic corporation must file an income tax return whether or not it has taxable income, and corporations in bankruptcy are included. Form 1120 is the default return: a corporation uses it unless it is required to file, or elects to file, one of the special returns listed in the instructions. A domestic entity electing to be classified as an association taxable as a corporation also files Form 1120 and attaches a copy of Form 8832.

When is Form 1120 due for a 2025 tax year?

Generally by the 15th day of the 4th month after the end of the corporation's tax year. The same rule sets the deadline for a short-period return by a new corporation and for a corporation that has dissolved. A corporation with a fiscal tax year ending June 30 files by the 15th day of the 3rd month after the end of its tax year instead. If the due date falls on a Saturday, Sunday, or legal holiday, the corporation can file on the next business day.

Can a corporation get an extension of time to file Form 1120?

Yes. File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, and generally file it by the regular due date of the return. An extension of time to file is not an extension of time to pay. The instructions state that interest is charged on taxes paid late even if an extension of time to file is granted, so the rate applied on Schedule J does not change what a late payment costs.

Does the 21% rate apply to an S corporation?

No. The Instructions for Form 1120 list an S corporation under section 1361 among the organizations that file a special return, Form 1120-S, rather than Form 1120. Because the 21% computation lives on Schedule J of Form 1120, an entity routed to a different return does not use it. The same table sends a Subchapter T cooperative association to Form 1120-C, a regulated investment company under section 851 to Form 1120-RIC, and a homeowners association electing under section 528 to Form 1120-H.

Does a corporation have to make estimated tax payments?

Generally yes, once it expects its total tax for the year, less applicable credits, to reach the amount named in the instructions. The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year, moving to the next business day if a date falls on a Saturday, Sunday, or legal holiday. A corporation that does not deposit estimated tax when due may owe a penalty, figured on Form 2220, Underpayment of Estimated Tax by Corporations.

Does a corporation have to file Form 1120 electronically?

Often. For returns filed on or after January 1, 2024, a corporation must e-file Form 1120 if it files at or above the count of returns of any type set by Regulations section 301.6011-5 during the calendar year, counting income tax, employment tax, excise tax, and information returns together. A corporation can request a waiver of the electronic filing requirement. E-filing also covers Form 7004 and the employment tax returns, and a balance due can be settled by electronic funds withdrawal while e-filing.

2025 Corporate Tax Rate

Name: 2025 Corporate Tax Rate
Creator: IRS

The 2025 Corporate Tax Rate is 21%.

Rate21%

Effective 2025-01-01Source: 2025 Instructions for Form 1120 (IRS)Verified 2026-09-04

Compared with 2024

Every figure on this page is unchanged from 2024.

Item	2024	2025	Change
Rate	21%	21%	+0% (+0.0%)

Who it applies to

The rate applies to corporations that file Form 1120. Unless it is exempt under section 501, every domestic corporation, including one in bankruptcy, must file an income tax return whether or not it has taxable income, and it files Form 1120 unless it is required or elects to file a special return. A domestic entity that elects to be classified as an association taxable as a corporation also files Form 1120 and attaches Form 8832, Entity Classification Election, for the year of the election. Many organizations are routed elsewhere by the Special Returns table in the instructions: an S corporation under section 1361 files Form 1120-S, a life insurance company under section 801 files Form 1120-L, a real estate investment trust under section 856 files Form 1120-REIT, and a political organization under section 527 files Form 1120-POL. An LLC with more than one owner formed under state law is generally treated as a partnership and files Form 1065 instead.

What changed this year, and why

The federal corporate income tax rate for 2025 is a flat 21%. The 2025 Instructions for Form 1120 carry that rate in the Schedule J tax computation: line 1a tells a corporation to multiply its taxable income by 21% and enter the result there. No graduated bracket table stands behind it, so a small corporation and a large one apply the same 21% to whatever taxable income they report. Nothing in the What's New section of the 2025 instructions touches the rate. The items flagged there are an election for gain on sales of qualified farmland to qualified farmers, penalty relief connected to the corporate alternative minimum tax, new direct deposit fields on the form, and a deduction for domestic research and experimental expenditures under section 174A.

Common questions

What is the federal corporate income tax rate for 2025?: It is 21%, applied as a single flat rate to a corporation's taxable income. The Instructions for Form 1120 put the calculation on Schedule J, line 1a: take taxable income from the face of the return and multiply it by 21%. There is no graduated schedule of brackets behind that figure, so the same 21% applies to the first slice of taxable income and to the last, no matter how large the corporation is.
Is the corporate tax rate flat or graduated?: Flat. The tax computation in the Instructions for Form 1120 is a single multiplication rather than a bracket table: taxable income times 21%, entered on Schedule J, line 1a. Other lines of Schedule J can add to the chapter 1 tax, such as tax from Form 1120-L for a mutual savings bank conducting a life insurance business, section 1291 tax from Form 8621, and a tax adjustment from Form 8978. None of those lines changes the 21% rate itself.
Which corporations have to file Form 1120?: Unless it is exempt under section 501, every domestic corporation must file an income tax return whether or not it has taxable income, and corporations in bankruptcy are included. Form 1120 is the default return: a corporation uses it unless it is required to file, or elects to file, one of the special returns listed in the instructions. A domestic entity electing to be classified as an association taxable as a corporation also files Form 1120 and attaches a copy of Form 8832.
When is Form 1120 due for a 2025 tax year?: Generally by the 15th day of the 4th month after the end of the corporation's tax year. The same rule sets the deadline for a short-period return by a new corporation and for a corporation that has dissolved. A corporation with a fiscal tax year ending June 30 files by the 15th day of the 3rd month after the end of its tax year instead. If the due date falls on a Saturday, Sunday, or legal holiday, the corporation can file on the next business day.
Can a corporation get an extension of time to file Form 1120?: Yes. File Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, and generally file it by the regular due date of the return. An extension of time to file is not an extension of time to pay. The instructions state that interest is charged on taxes paid late even if an extension of time to file is granted, so the rate applied on Schedule J does not change what a late payment costs.
Does the 21% rate apply to an S corporation?: No. The Instructions for Form 1120 list an S corporation under section 1361 among the organizations that file a special return, Form 1120-S, rather than Form 1120. Because the 21% computation lives on Schedule J of Form 1120, an entity routed to a different return does not use it. The same table sends a Subchapter T cooperative association to Form 1120-C, a regulated investment company under section 851 to Form 1120-RIC, and a homeowners association electing under section 528 to Form 1120-H.
Does a corporation have to make estimated tax payments?: Generally yes, once it expects its total tax for the year, less applicable credits, to reach the amount named in the instructions. The installments are due by the 15th day of the 4th, 6th, 9th, and 12th months of the tax year, moving to the next business day if a date falls on a Saturday, Sunday, or legal holiday. A corporation that does not deposit estimated tax when due may owe a penalty, figured on Form 2220, Underpayment of Estimated Tax by Corporations.
Does a corporation have to file Form 1120 electronically?: Often. For returns filed on or after January 1, 2024, a corporation must e-file Form 1120 if it files at or above the count of returns of any type set by Regulations section 301.6011-5 during the calendar year, counting income tax, employment tax, excise tax, and information returns together. A corporation can request a waiver of the electronic filing requirement. E-filing also covers Form 7004 and the employment tax returns, and a balance due can be settled by electronic funds withdrawal while e-filing.

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

C corporations pay the 21% tax rate. Limited liability companies do not automatically pay at this rate: a multi-member LLC is generally treated as a partnership and files Form 1065, while a single-member LLC is disregarded and reports on the owner's return. However, an LLC can file Form 1120 and pay at the 21% corporate rate only if it has filed Form 8832, Entity Classification Election, to elect to be treated as an association taxable as a corporation. The election form must be attached to the Form 1120 filed for the year of the election.

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.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)

The filing deadline, and the extension

Corporations must generally file their income tax return by the 15th day of the 4th month after the end of their tax year. New corporations filing short-period returns and dissolved corporations follow the same timeline from when their short period ends or when they dissolve. However, corporations with fiscal tax years ending June 30 have a different deadline: they must file by the 15th day of the 3rd month after the end of their tax year. This earlier deadline applies to short tax years ending anytime in June as well. If the due date falls on a Saturday, Sunday, or legal holiday, the corporation can file on the next business day without penalty. The filing deadline applies to all corporations subject to the 21% tax rate, including C corporations and LLCs that have elected corporate tax treatment.

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.
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. If any due date falls on a Saturday, Sunday, or legal holiday, the payment is due on the next business day. Corporations subject to the 21% corporate tax rate must follow these estimated payment rules to avoid penalties for underpayment. The four installment dates align roughly with quarters of the tax year, ensuring that tax obligations are paid throughout the year rather than in a single lump sum at filing time.

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.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)

Personal service corporations pay at the same rate

Two facts decide whether a corporation is a personal service corporation, and neither of them is what the business calls itself. The first is what it mainly did during the testing period, and the testing period is normally the year before the one being filed - so a 2025 return is classified on 2024's activity, and a corporation formed part-way through has no earlier year to read, which puts the question on the time it has existed. The second is who did the work: the services have to be substantially performed by employee-owners. A practice in one of the listed fields whose fee income is earned largely by employees holding no stock can therefore sit outside the definition, while a small owner-run firm in the same trade sits squarely inside it. What does not turn on any of this is the rate. A personal service corporation multiplies its taxable income by the same 21% as any other corporation filing Form 1120. The label carries consequences elsewhere on the return; the percentage is not one of them.

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

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 reasonable cause for the failure to file. Interest is also charged on taxes paid late even if an extension of time to file is granted, and interest is charged on penalties from the due date (including extensions) to the date of payment. For 2025 returns, the 21% corporate tax rate applies to calculate the unpaid tax amount subject to these penalties.

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.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)

What the 21% actually multiplies

For a corporation filing Form 1120, the 21% rate is not applied to gross receipts or total revenue. The IRS instructions for Schedule J, Line 1a, direct the filer to multiply taxable income - the figure that appears on page 1, line 30 of the return - by 21%. Taxable income is the result after the corporation has taken into account all allowable deductions, such as ordinary and necessary business expenses, depreciation, and other items permitted under the Internal Revenue Code. Gross receipts, by contrast, are the total amounts received from all sources before any deductions are applied. Because the rate multiplies only the net figure, two corporations with identical gross receipts can owe very different amounts of tax depending on their deductible expenses. The 21% rate is a flat rate; it does not rise through graduated brackets the way individual income tax rates do. The amount computed on Line 1a is the regular chapter 1 income tax, and it is the starting point before any additional taxes (such as the corporate alternative minimum tax) or credits are applied elsewhere on Schedule J.

Line 1a. Income tax. Multiply taxable income (page 1, line 30) by 21% (0.21). Enter this amount on line 1a.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)

The 21% is not the whole bill: CAMT can add to it, credits can reduce it

On Schedule J of Form 1120 for 2025, the regular corporate income tax of 21% on taxable income is only one component of the total tax a corporation may owe. Line 3 of Schedule J adds the Corporate Alternative Minimum Tax (CAMT), computed separately on Form 4626, on top of the regular tax. The CAMT is a parallel minimum tax that certain large corporations must calculate alongside the regular 21% rate; if the CAMT amount exceeds the regular tax, the corporation pays the higher figure. At the same time, Schedule J provides lines for various nonrefundable credits - including the foreign tax credit, the general business credit, the credit for prior year minimum tax, and bond credits - that reduce the corporation's tax liability dollar for dollar. Credits are totaled on line 6 and subtracted from the combined regular tax and CAMT. In practice, the 21% flat rate is the starting point: the Corporate Alternative Minimum Tax can increase the final amount owed, while the available credits can decrease it. The net result after adding CAMT and subtracting credits is the corporation's total chapter 1 tax for the year.

Line 3. Corporate Alternative Minimum Tax Enter on line 3 the amount from Form 4626, Alternative Minimum Tax—Corporations, Part II, line 13, if applicable. See the Instructions for Form 4626.
2025 Instructions for Form 1120, U.S. Corporation Income Tax Return (IRS)

The accumulated earnings tax rate, and the general safe harbor

A corporation that lets its earnings accumulate beyond the reasonable needs of the business may owe an accumulated earnings tax of 20% on the amount accumulated, on top of the regular 21% corporate rate. If the tax applies, interest runs on it from the date the corporate return was originally due, without regard to any extension. Publication 542 sets a general safe harbor: an accumulation of $250,000 or less is generally treated as within the reasonable needs of most businesses, so the tax reaches accumulations above that amount.

if a corporation allows earnings to accumulate beyond the reasonable needs of the business, it may be subject to an accumulated earnings tax of 20%. If the accumulated earnings tax applies, interest applies to the tax from the date the corporate return was originally due, without ex- tensions. To determine if the corporation is subject to this tax, first treat an accumulation of $250,000 or less generally as
Publication 542 (Rev. January 2024), Corporations (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.

2025 Instructions for Form 1120 (IRS)

Rate: Line 1a. Income tax. Multiply taxable income (page 1, line 30) by 21% (0.21). Enter this amount on line 1a.

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Verified 2026-09-04
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