Accumulated Earnings Tax

Accumulated Earnings (Profits) Tax
A 15% penalty surcharge on earnings retained in a corporation to avoid the higher personal income taxes to which they would be subject if paid out as dividends to the owners.
Dividends-Paid Deduction
An adjustment from taxable income in computing both the accumulated earnings tax and the personal holding company tax. The amount of the adjustment includes regular dividends, dividends paid during a 12-month grace period, consent dividends, and deficiency dividends (for the personal holding company tax only).

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