IC-DISC News Update

We have some great news to share. Based on the House and Senate bills that were submitted last week, the IC-DISC appears to still be a viable tax savings vehicle for the foreseeable future.

But one area of confusion that we do want to address is that of the corporate tax rate. Many owners of S Corporations are under the false impression that the new S Corporation tax rate will be 20 percent. If so, there would be no need for this IC-DISC going forward. But the problem is, that’s not true.

The only corporations that would enjoy this rate would be C Corporations. Although S Corporations would receive a reduction in tax rates under both the Senate and House versions of the bills, those rates will certainly NOT be 20 percent. At a minimum, the new effective S Corporation tax would be at least 30 percent. Thus, it appears there will still be a benefit to utilizing the IC-DISC.

Once the two bills are reconciled and we have more clarity on the impact of the provisions contained in the final bill, we will provide you with a more comprehensive update.

Thank you to everyone who helped us keep the IC-DISC benefit available for U.S.-based manufacturing companies.