GILTI and the Section 962 Election: How US Shareholders of Foreign Corporations Can Slash Their Tax Bill
A Section 962 election lets US individual owners of a controlled foreign corporation be taxed on GILTI/NCTI at corporate rates, cutting the effective US rate from up to 37% to roughly 12.6% in 2026. The OBBBA reduced the Section 250 deduction to 40%, eliminated the QBAI carve-out, and raised the indirect foreign tax credit cap from 80% to 90% — but PTEP rules can still trigger a second layer of US tax when earnings are eventually distributed.
