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§962 Assistant

Make §962 Elections a Breeze.

Internal Revenue Code §962

Be taxed as a corporation on your CFC income.

A §962 election lets an individual U.S. shareholder apply corporate tax rules to GILTI / NCTI and Subpart F inclusions — unlocking the §250 deduction and deemed-paid foreign tax credits. The §962 Assistant turns that election into a complete, ready-to-file package in minutes.

Build a §962 package →How the election works

Generates the election statement plus Forms 8992 · 8993 · 1118

§962 — key facts
Enacted
Revenue Act of 1962 · P.L. 87-834
Applies to
Individual U.S. shareholders of a CFC
Income
Subpart F · GILTI / NCTI
Statute
26 U.S.C. §962
Election
Annual · Treas. Reg. §1.962-2

What it is

A way for individuals to claim corporate-only benefits

U.S. shareholders of a controlled foreign corporation must include their share of the CFC’s Subpart F income and GILTI / NCTI each year — whether or not any cash is distributed. By default, an individual pays tax on that income at ordinary rates and gets none of the relief a corporation would.

Who is a U.S. shareholder? Generally a U.S. person who owns 10% or more of the vote or value of a foreign corporation. A CFC is a foreign corporation more than 50% owned (by vote or value) by such U.S. shareholders.

A §962 election lets an individual U.S. shareholder (and certain trusts and estates) elect to be taxed at corporate rates on Subpart F and GILTI / NCTI inclusions — as if the income passed through a hypothetical domestic C corporation.

That fiction is what unlocks the value: the electing individual can claim the §250 deduction against GILTI / NCTI and a deemed-paid (indirect) foreign tax credit under §960 for the income taxes the CFC already paid abroad — credits that are otherwise unavailable to an individual filing directly.

How it works

One legal fiction, carried through to the end

The election treats your CFC income as if a domestic C corporation stood between you and the foreign company. That single assumption drives everything — including a trade-off you accept when the cash finally comes home.

1

Insert a hypothetical corporation

Your Subpart F and GILTI / NCTI inclusions are computed as if earned by a domestic C corporation you notionally own.

2

Apply corporate rates & the §250 deduction

The income is taxed at 21%, reduced by the §250 deduction on GILTI / NCTI — roughly halving the base.

3

Credit the foreign taxes already paid

Under §960, the CFC’s foreign income taxes flow through as a deemed-paid credit — often wiping out the residual U.S. tax.

4

Settle up on distribution

When the earnings are later actually distributed, the amount above the U.S. tax already paid is taxed again as a dividend under §962(d).

Weigh it

Real benefits, real trade-offs

A §962 election is not automatically the right move. It is a model-it-out decision that turns on foreign tax rates and what happens when the money is distributed.

Why shareholders elect

  • Lower current rate. Corporate 21% in place of individual rates up to 37%.
  • The §250 deduction. Cuts the GILTI / NCTI base by 50% (2025) or 40% (2026+).
  • Indirect foreign tax credit. The CFC’s foreign taxes become creditable under §960 — otherwise lost.
  • Often a near-zero U.S. tax on the inclusion when the CFC is taxed abroad at a reasonable rate.
  • No need to actually form a U.S. corporation to get corporate treatment.

What to watch for

  • A second tax on distribution. Earnings above the U.S. tax already paid are taxed again as a dividend.
  • Added complexity. Corporate-style computations and extra forms each year.
  • State conformity varies. Many states don’t follow the federal §962 result.
  • Currency translation. Foreign taxes and E&P must be translated under §986.
  • It’s annual. The analysis has to be revisited every year.

The §962 Assistant

Skip the formatting. Keep the accuracy.

Enter income and foreign-tax data through a guided flow. The Assistant runs the GILTI / NCTI, §250, and §960 calculations and assembles a polished, IRS-compliant election package — done for you.

Get started & sign up →Read the full guide
  • Guided entry for CFC income & foreign taxes
  • Automatic calculations — GILTI / NCTI, §250, §960
  • Complete package — statement + 8992, 8993, 1118
  • Accurate & compliant, ready to file
  • Minutes, not hours — and far fewer errors