MVA
ServicesMVA · Quakertown, PA

IC-DISC Export Tax Planning

Permanent federal rate arbitrage on qualified export income for pass-through exporters, coordinated with entity tax planning rather than bolted on after the fact.

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Export margin taxed at ordinary rates

Profitable U.S. manufacturers and distributors with export sales often leave IC-DISC benefits unclaimed, either because the structure looks complicated or because nobody tied export margin to entity-level tax planning.

Structured beside the operating engagement

IC-DISC work runs beside your operating tax engagement. Export margin, transfer pricing support, and §199A interaction are reviewed by the same team that signs your return.

How this saves you money
  • Permanent rate arbitrage. Convert a slice of qualified export margin from ordinary rates to qualified-dividend treatment: a permanent federal saving, not a timing deferral.
  • Money most exporters leave behind. Profitable U.S. manufacturers and distributors with export sales often never claim it because the structure looks complicated.
  • Scales with export growth. The benefit grows as export sales grow, so it is worth structuring before a year-end dividend strategy is locked in.
  • Coordinated with §199A. Modeled so the structure doesn’t accidentally sacrifice other pass-through benefits.
  • Administered in-house. Annual commission calculations, Form 1120-IC-DISC, and shareholder reporting handled as part of the tax engagement.

Best fit: Pass-through exporters with qualified export receipts, typically manufacturers and distributors selling U.S.-made goods abroad

How the engagement runs

  1. 01 · Export margin review

    We map qualified export receipts, related-party sales, and whether IC-DISC economics pencil against your margin profile.

  2. 02 · Entity design

    Commission IC-DISC structure, elections, and compliance calendar, with Form 1120-IC-DISC and shareholder reporting integrated with the group return.

  3. 03 · Annual administration

    Qualified export receipts, commission calculations, and dividend flow documented for shareholders and state conformity.

  4. 04 · Planning integration

    Results feed quarterly tax projections and cash planning, especially when export mix shifts year to year.

The spread on qualified export income

For qualifying exporters, the spread between ordinary rates and qualified dividend treatment on export margin can be meaningful, particularly when export sales are a growing line on the income statement.

Who this is forManufacturing · Distribution · Industrial products · Food & beverage production · Component suppliers with export sales

Common questions

Who is a good IC-DISC candidate?
Pass-through exporters with qualified export receipts, often manufacturers and distributors selling U.S.-made goods abroad or to related foreign parties.
How does IC-DISC interact with Section 199A?
Coordination matters. We model both so the structure does not accidentally sacrifice other pass-through benefits.
Is ongoing compliance required?
Yes: annual commission calculations, Form 1120-IC-DISC, and shareholder reporting. MVA administers as part of the tax engagement.
When should we evaluate IC-DISC?
When export sales are growing, when margin is under pressure, or before a year-end dividend strategy is set without modeling federal rate arbitrage.
Where MVA works

Owner-operators across the region, and the markets they sell into.

From PA, NJ, NY, and DE to export markets abroad, MVA structures the tax around how your business actually reaches its customers, including IC-DISC planning for the export margin most firms leave on the table.

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