IRS Clarifies Rules for Corporate AMT

 – December 15, 2023
IRS Clarifies Rules for Corporate AMT

The Department of Treasury and the Internal Revenue Service today issued  Notice 2024-10 to provide additional interim guidance on the new corporate alternative minimum tax (CAMT).

Previously, the IRS issued  Notice 2023-64, which clarifies and supplements  Notice 2023-07 and  Notice 2023-20 issued earlier this year. Treasury and IRS anticipate that forthcoming proposed regulations will be consistent with this interim guidance.

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

Today's guidance provides rules for determining the AFSI of a U.S. Shareholder when a controlled foreign corporation (CFC) pays a dividend to the U.S. Shareholder or another CFC.

The guidance also modifies and clarifies the rules in Notice 2023-64 for determining the applicable financial statement of a corporation that is included in a consolidated tax return.