Figuring Tax After you figure a corporation's taxable income, you can figure itstax on Schedule J (Form 1120) or Part I (Form 1120-A). Thissection discusses the tax rate schedule, credits, recapture taxes, andthe alternative minimum tax. Tax Rate Schedule Most corporations figure their tax by using the following tax rateschedule. This section discusses an exception that applies toqualified personal service corporations. Other exceptions arediscussed in the instructions for Schedule J, Form 1120 (Part I, Form1120-A). Tax Rate Schedule If taxable income (line 30, Form 1120,or line 26, Form 1120-A) is: Of the But not amount Over-- over-- Tax is: over-- $0 50,000 15% -0- $50,000 75,000 $ 7,500 + 25% $50,000 75,000 100,000 13,750 + 34% 75,000 100,000 335,000 22,250 + 39% 100,000 335,000 10,000,000 113,900 + 34% 335,000 10,000,000 15,000,000 3,400,000 + 35% 10,000,000 15,000,000 18,333,333 5,150,000 + 38% 15,000,000 18,333,333 ---------- 35% -0- Qualified personal service corporation.A qualified personal service corporation is taxed at a flat rate of35% on taxable income. A corporation is a qualified personal servicecorporation if it meets both of the following tests. Liepaja reservar hotelesSubstantially all of the corporation's activities involvethe performance of personal services (as defined earlier underPersonal services). At least 95% of the corporation's stock, by value, is owned,directly or indirectly, by any of the following. Employees performing the personal services. Retired employees who had performed the personalservices. Any estate of the employee or retiree describedabove. Any person who acquired the stock of the corporation as aresult of the death of an employee or retiree (but only for the 2-yearperiod beginning on the date of the employee's or retiree'sdeath). See section 1.448-1T(e) of the regulations for details. Credits A corporation's tax liability is reduced if it can take anycredits. The following list includes some credits that are availableto corporations. five star hotel in BirminghamCredit for federal tax on fuels used for certain purposes(see Publication 378). Credit for prior year minimum tax (see Form8827). Foreign tax credit (see Form 1118). General business credit (see General business credit,next). Nonconventional source fuel credit (see section 29 of theInternal Revenue Code). Possessions tax credit (see Form 5735). Qualified electric vehicle credit (see Form8834). General business credit.Your general business credit for the year consists of yourcarryforward of business credits from prior years plus your totalcurrent year business credits. Current year business credits includethe following credits. Alcohol used as fuel credit (Form 6478). Contributions to selected community development corporationscredit (Form 8847). Disabled access credit (Form 8826). Employer social security and Medicare taxes paid on certainemployee tips credit (Form 8846). Empowerment zone employment credit (Form 8844). Enhanced oil recovery credit (Form 8830). Indian employment credit (Form 8845). Investment credit (Form 3468). Low-income housing credit (Form 8586). Orphan drug credit (Form 8820). Renewable electricity production credit (Form8835). Research credit (Form 6765). Welfare-to-work credit (Form 8861). Work opportunity credit (Form 5884). In addition, your general business credit for the current yearmay be increased later by the carryback of business credits from lateryears. To claim a general business credit, you will first need to get theform or forms you need to claim your current year business credits.The above list contains a list of current year business credits. Theform used to claim each credit is shown in parentheses. In addition tothe credit form, you may also need to file Form 3800. Who must file Form 3800.You must file Form 3800 if any of the following apply. You have more than one of the credits listed earlier (otherthan the empowerment zone employment credit). You have a carryback or carryforward of any of these credits(other than the empowerment zone employment credit). Any of these credits (other than the low-income housingcredit or the empowerment zone employment credit) is from a passiveactivity. (For information about passive activity credits, seeForm 8582-CR.) The empowerment zone employment credit is subject to special rules.The credit is figured separately on Form 8844 and is not carried toForm 3800. For more information, see the instructions for Form 8844. See the instructions to Form 3800 for more information about thegeneral business credit. Recapture Taxes A corporation's tax liability is increased if it must recapturecredits that it has taken in prior years. The following list includessome credits that a corporation may need to recapture. Indian employment credit (see the instructions for Form8845). Investment credit (see the instructions for Form4255). Low-income housing credit (see the instructions forForm 8611). Qualified electric vehicle credit (see the instructions forForm 8834). Alternative MinimumTax (AMT) The tax laws give special treatment to some types of income andallow special deductions and credits for some types of expenses. Theselaws enable some corporations with substantial economic income tosignificantly reduce their regular tax. The purpose of the corporatealternative minimum tax (AMT) is to ensure that these corporations paya minimum amount of tax on their economic income. A corporation owesAMT if its tentative minimum tax is more than its regular tax. Tentative minimum tax of a small corporation.For tax years beginning after 1997, the tentative minimum tax of asmall corporation is zero. This means that a small corporation willnot owe AMT. Small corporation.For AMT purposes, a corporation is a small corporation if it meetsany of the following tests. This is its first tax year. This is its second tax year and its annual gross receiptsfor its first tax year were not more than $5,000,000. This is its third tax year and its average annual grossreceipts for its first two tax years were not more than$5,000,000. This is its fourth tax year and its average annual grossreceipts for its first three tax years were not more than$5,000,000. This is its fifth or later tax year and it meets both of thefollowing tests. Its average annual gross receipts for its first 3-tax-yearperiod beginning after 1993 were not more than $5,000,000. Its average annual gross receipts for all later 3-tax-yearperiods beginning after 1993 and ending before the current tax yearwere not more than $7,500,000. For these tests, gross receipts for a short tax year areannualized. Form 4626.Use Form 4626 to figure the tentative minimum tax of a corporationthat is not a small corporation for AMT purposes.