Federal corporate tax brackets no longer exist. Since 2018, every C-corporation pays a flat 21% on its taxable income, no matter how much it earns.1Office of the Law Revision Counsel. 26 USC 11 – Tax Imposed The graduated bracket system that once taxed corporate income at rates from 15% to 35% was eliminated by the Tax Cuts and Jobs Act of 2017. Brackets still show up at the state level in about a dozen states, and a separate 15% minimum tax applies to a small group of very large corporations, but for federal planning purposes there is one rate.
The Flat 21% Federal Rate
Internal Revenue Code Section 11 imposes a 21% tax on the taxable income of every corporation.1Office of the Law Revision Counsel. 26 USC 11 – Tax Imposed A company with $50,000 in taxable income and a company with $50 million in taxable income face the same percentage. The rate is applied after deductions, not to gross revenue.
Unlike many of the individual tax provisions in the TCJA, the corporate rate reduction is permanent under current law. There is no scheduled expiration and no phase-back to the older tiered system.
What the Old Federal Brackets Looked Like
If you’re searching for corporate tax brackets because you remember the pre-2018 structure, here is what it replaced. C-corporations moved through eight tiers. The first $50,000 of income was taxed at 15%. Income above $18.3 million was taxed at 35%. Two “bubble” brackets at 39% and 38% phased out the benefit of the lower rates for mid-size and large corporations, so the largest companies effectively paid a near-flat 35% anyway. The TCJA collapsed all of that into the single 21% rate.
State Corporate Tax Rates and Brackets
Federal tax is only half the picture. Forty-four states impose their own corporate income tax. The lowest top rate is around 2%, the highest reaches 11.5%, and a common midpoint is roughly 6% to 7%. Most states apply a single flat rate, but several still use graduated brackets that resemble the old federal system, with higher percentages kicking in as income rises.
States that use bracketed corporate tax systems include Alaska, Arkansas, Hawaii, Iowa, Kansas, Maine, Mississippi, New Jersey, New York, North Dakota, Oregon, and Vermont, among others. If your corporation files in one of these states, the rate you actually pay depends on which tier your taxable income lands in.
Six states levy no traditional corporate income tax at all: Nevada, Ohio, South Dakota, Texas, Washington, and Wyoming. That doesn’t always mean tax-free operation. Nevada, Ohio, Texas, and Washington impose gross receipts taxes, which apply to total revenue rather than profit and can hit low-margin businesses harder than a typical income tax because there is no deduction for costs. South Dakota and Wyoming are the only two states with neither a corporate income tax nor a gross receipts tax.
The 15% Minimum Tax on Billion-Dollar Corporations
The flat 21% covers almost every C-corporation, but a narrow group of very large filers faces an additional layer. The Corporate Alternative Minimum Tax, added by the Inflation Reduction Act in 2022, imposes a 15% minimum tax on adjusted financial statement income for corporations that average more than $1 billion in annual profits.2Internal Revenue Service. IRS Clarifies Rules for Corporate Alternative Minimum Tax The threshold is profit, not revenue.3U.S. Department of the Treasury. U.S. Department of the Treasury Releases Proposed Rules for Corporate Alternative Minimum Tax
The CAMT is calculated differently from the regular corporate tax. It uses adjusted financial statement income, which is essentially the profit reported to shareholders, rather than taxable income after deductions and credits. If a corporation’s regular 21% liability already meets or exceeds 15% of that book income, no additional CAMT is owed.4Office of the Law Revision Counsel. 26 USC 55 – Alternative Minimum Tax Imposed In practice the tax targets companies that report large book profits while paying little federal income tax through aggressive deductions. Small and mid-size corporations will never encounter it.
Which Businesses Pay the Corporate Rate
The 21% federal rate and state corporate taxes apply to C-corporations, which are businesses organized under Subchapter C of the Internal Revenue Code. A C-corporation is a separate taxpayer: the company files its own return and pays tax on its profits before any money reaches shareholders.
This structure produces double taxation. The corporation pays 21% at the entity level. When after-tax profits are distributed as dividends, shareholders pay again on their personal returns. Qualified dividends are taxed at rates up to 20%, and high-income shareholders also owe the 3.8% net investment income tax. The combined federal tax on a dollar of corporate profit that ends up in a shareholder’s pocket as a qualified dividend can reach roughly 39.8%.
Pass-Through Businesses Don’t Use the Corporate Rate
Sole proprietorships, partnerships, and S-corporations avoid the corporate tax entirely. Profits flow through to the owners and are taxed at individual rates on their personal returns. The comparison shifted meaningfully in 2026: the qualified business income deduction under Section 199A, which had let eligible pass-through owners deduct up to 20% of their business income, expired for tax years beginning after December 31, 2025.5Internal Revenue Service. Qualified Business Income Deduction Without it, pass-through income is taxed at the owner’s full individual rate, which reaches 37% at the top. The gap between the 21% corporate rate and higher individual rates has made C-corporation status more appealing for some businesses, though double taxation on distributions can wipe out the advantage.
LLCs Choose Their Tax Treatment
Limited liability companies don’t fall neatly into either camp. By default, a single-member LLC is taxed as a sole proprietorship and a multi-member LLC is taxed as a partnership, both pass-through. LLC owners can file Form 8832 to elect corporate treatment instead, at which point the 21% federal rate and all corporate filing rules apply.6Internal Revenue Service. About Form 8832, Entity Classification Election The election sticks for tax purposes until formally revoked, so the numbers are worth modeling before filing.