The 2017 Tax Cuts and Jobs Act established for 2018 a new flat 21% federal income tax rate for C corporations (“C Corps”). This 21% rate is significantly lower than the 2017 top C Corp. rate of 35% and the new 2018 individual tax rate of 37% which would apply to ordinary income from pass-through entities such as partnerships or S corporations (“S Corp”).

So, shouldn’t all companies now opt to be taxed as C Corps? Not so fast.