Imposition of accumulated earnings tax

  1. Law
  2. USC 26
  3. Internal Revenue Code
  4. Income Taxes
  5. NORMAL TAXES AND SURTAXES
  6. Corporations Used to Avoid Income Tax on Shareholders
  7. CORPORATIONS IMPROPERLY ACCUMULATING SURPLUS
  8. Imposition of accumulated earnings tax

Checkout our iOS App for a better way to browser and research.

§531. Imposition of accumulated earnings tax

In addition to other taxes imposed by this chapter, there is hereby imposed for each taxable year on the accumulated taxable income (as defined in section 535) of each corporation described in section 532, an accumulated earnings tax equal to 20 percent of the accumulated taxable income.

(Aug. 16, 1954, ch. 736, 68A Stat. 179 ; Pub. L. 100–647, title I, §1001(a)(2)(A), Nov. 10, 1988, 102 Stat. 3349 ; Pub. L. 103–66, title XIII, §§13201(b)(1), 13202(b), Aug. 10, 1993, 107 Stat. 459 , 461; Pub. L. 107–16, title I, §101(c)(4), June 7, 2001, 115 Stat. 43 ; Pub. L. 108–27, title III, §302(e)(5), May 28, 2003, 117 Stat. 764 ; Pub. L. 112–240, title I, §102(c)(1)(A), Jan. 2, 2013, 126 Stat. 2319 .)

Amendments

2013-Pub. L. 112–240 substituted "20 percent" for "15 percent".

2003-Pub. L. 108–27 substituted "equal to 15 percent of the accumulated taxable income." for "equal to the product of the highest rate of tax under section 1(c) and the accumulated taxable income."

2001-Pub. L. 107–16 substituted "equal to the product of the highest rate of tax under section 1(c) and the accumulated taxable income." for "equal to 39.6 percent of the accumulated taxable income."

1993-Pub. L. 103–66, §13202(b), substituted "39.6 percent" for "36 percent".

Pub. L. 103–66, §13201(b)(1), substituted "36 percent" for "28 percent".

1988-Pub. L. 100–647 amended section generally. Prior to amendment, section read as follows: "In addition to other taxes imposed by this chapter, there is hereby imposed for each taxable year on the accumulated taxable income (as defined in section 535) of every corporation described in section 532, an accumulated earnings tax equal to the sum of-

"(1) 27½ percent of the accumulated taxable income not in excess of $100,000, plus

"(2) 38½ percent of the accumulated taxable income in excess of $100,000."

Effective Date of 2013 Amendment

Amendment by Pub. L. 112–240 applicable to taxable years beginning after Dec. 31, 2012, see section 102(d)(1) of Pub. L. 112–240, set out as a note under section 1 of this title.

Effective Date of 2003 Amendment

Amendment by Pub. L. 108–27 applicable, except as otherwise provided, to taxable years beginning after Dec. 31, 2002, see section 302(f) of Pub. L. 108–27, set out as an Effective and Termination Dates of 2003 Amendment note under section 1 of this title.

Effective Date of 2001 Amendment

Amendment by Pub. L. 107–16 applicable to taxable years beginning after Dec. 31, 2000, see section 101(d)(1) of Pub. L. 107–16, set out as an Effective and Termination Dates of 2001 Amendment note under section 1 of this title.

Effective Date of 1993 Amendment

Amendment by Pub. L. 103–66 applicable to taxable years beginning after Dec. 31, 1992, see sections 13201(c) and 13202(c) of Pub. L. 103–66, set out as notes under section 1 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title I, §1001(a)(2)(B), Nov. 10, 1988, 102 Stat. 3349 , provided that: "The amendment made by subparagraph (A) [amending this section] shall apply to taxable years beginning after December 31, 1987. Such amendment shall not be treated as a change in a rate of tax for purposes of section 15 of the 1986 Code."


Download our app to see the most-to-date content.