Calculate federal and state corporate taxes for 2026. Compare C-Corp vs S-Corp/LLC tax treatment for all 50 states.
C-Corp vs S-Corp/LLC — Key Differences
C-Corporation: Pays federal corporate tax at a flat 21% rate, plus state corporate tax. Profits are taxed twice — once at the corporate level and again when dividends are paid to shareholders (double taxation). Best for companies planning to reinvest profits or go public.
S-Corporation / LLC: Pass-through taxation — profits flow directly to owners' personal tax returns. No corporate-level federal tax. The company itself pays no federal income tax. Best for small businesses with profits under ~$500K and active owners who take salaries.
QBI Deduction: S-Corp and LLC owners may deduct up to 20% of qualified business income from their personal taxable income, further reducing the effective tax rate.
Frequently Asked Questions
What is the US federal corporate tax rate?+
The US federal corporate income tax rate is a flat 21% for C-Corporations, established by the Tax Cuts and Jobs Act (TCJA) of 2017. S-Corporations and LLCs do not pay federal corporate tax — income passes through to owners' personal returns.
Which states have no corporate income tax?+
Nevada, South Dakota, and Wyoming have no state corporate income tax. Washington and Texas have gross receipts taxes instead of income taxes. Ohio also uses a commercial activity tax (gross receipts) rather than a traditional corporate income tax.
When is a C-Corp better than an S-Corp?+
A C-Corp may be better when: (1) you plan to reinvest profits in the business (21% vs potentially higher personal rates), (2) seeking venture capital or going public (VC investors prefer C-Corps), (3) you have more than 100 shareholders or non-US shareholders (S-Corp restrictions), or (4) you want to offer employee stock options (ISOs).
What is the corporate alternative minimum tax (CAMT)?+
The Inflation Reduction Act (2022) introduced a 15% Corporate Alternative Minimum Tax on the "adjusted financial statement income" of corporations with average annual income over $1 billion. This affects large multinationals but not most small and mid-sized businesses.