The US Internal Revenue Service (IRS) issued IR-2024-235 on 12 September 2024, proposing regulations to provide guidance on the Corporate Alternative Minimum Tax (CAMT).
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 31 December 2022. The CAMT generally applies to large corporations with an average annual AFSI exceeding USD 1 billion.
The proposed regulations provide definitions and general rules for determining and identifying AFSI. They also include rules regarding various statutory and regulatory adjustments in determining AFSI; determining if a corporation is subject to the CAMT, including rules for members of a foreign parented multinational group (FPMG) and the determination of the CAMT foreign tax credit.
Additionally, the proposed regulations address the application of the CAMT to affiliated corporations filing a consolidated income tax return.
Previously the IRS issued Notice 2023-07, Notice 2023-20, Notice 2023-64 and Notice 2024-10, to provide interim guidance on the CAMT. Furthermore, the IRS today issued Notice 2024-66 PDF, which waives the penalty for a corporation’s failure to pay estimated tax with respect to its CAMT for a taxable year that begins after 31 December 2023 and before 1 January 2025.
