A new provision was included in the “Inflation Reduction Act of 2022” (IRA) on Monday, 6 May, 2024, officially known as H.R. 5376, which included a new Corporate Alternative Minimum Tax (CAMT).
This tax is determined based on the financial statement income of certain corporations.
The U.S. House of Representatives on 31 January, 2024, passed H.R. 7024, the “Tax Relief for American Families and Workers Act of 2024,” which may extend certain provisions under the “Tax Cuts and Jobs Act” (TCJA)— section 163(j) (business interest expense limitation), section 168(k) (bonus depreciation), and section 174 (amortisation of specified research and experimental expenditures).
However, there is uncertainty whether H.R. 7024 will be approved by Congress. If these extenders are enacted, it could impact a taxpayer’s CAMT liability for 2023 and beyond.
Additionally, the Biden administration has also put forward a proposal to raise the standard corporate tax rate to 28% and the CAMT rate to 21%.
