A "C corporation" refers to the federal tax classification of a corporation with respect to how federal income taxes are imposed on the corporation's earnings. When a corporation is classified as a C corporation, the corporation's earnings are taxed and paid by the corporation. If some earnings distributed as dividends to the stockholders, the dividends are again subject to another round of federal taxation at the stockholder level. In contrast, the earnings of an S corporation are federally taxed only once at the stockholder level.