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4 new determinates for the corporate alternative minimum tax

Posted on October 11, 2023

The Department of Treasury and the Internal Revenue Service has issued Notice 2023-64, providing interim guidance to help corporations determine whether the new corporate alternative minimum tax (CAMT) applies to them and how to compute the tax.

The Inflation Reduction Act created the CAMT, which generally applies to large corporations with average annual financial statement income exceeding $1 billion. CAMT imposes a 15% minimum tax on the adjusted financial statement income (AFSI) of large corporations for taxable years beginning after Dec. 31, 2022.

That said, determining CAMT liability can be challenging. Notice 2023-42 states the following:

  1. The IRS will waive the penalty for a corporation’s estimated income tax with respect to CAMT for a taxable year (Jan. 1, 2022 through Jan. 1, 2024.
  2. Adds a list of financial statements that meet the definition of an applicable financial statement (AFS) as well as priority rules for identifying a taxpayer’s AFS.
  3. General rules for determining a taxpayer’s financial statement income and AFSI, including when the taxpayer’s financial results are reported on a consolidated financial statement.
  4. Includes specific guidance on when corporations are subject to CAMT, CAMT foreign tax credits, tax consolidated groups, foreign corporations, depreciable property, wireless spectrum, duplications and omissions of certain items, and financial statement net operating losses.

CAMT liability can be complicated, which is why our CPA team is standing ready to help you determine how your business fits into the new IRS regulations.

We’re happy to answer your questions or provide guidance. As always, just give us a call.