IRS issue interim guidance on new corporate alternative minimum tax
Until the publication of proposed rules, the Internal Revenue Service has released Notice 2023-07PDF, which offers interim guidance on the implementation of the new corporate alternative minimum tax (CAMT).
The CAMT, which is a 15% minimum tax on the adjusted financial statement income of major firms for taxable years beginning after December 31, 2022, was established by the Inflation Reduction Act. Large firms with average annual financial statement incomes above $1 billion are often subject to the CAMT. Notice 2023-7 has been released by the Treasury Department and the IRS to give taxpayers assurance prior to the implementation of the CAMT.
Notice 2023-7
Notice 2023-7, in particular, defines which entities are subject to the CAMT and how the alternative minimum tax is determined. Additionally, it gives taxpayers basic responses to inquiries about how particular transactions may be handled and specific modifications that may be considered when determining the alternative minimum tax, such as depreciation and tax credit adjustments. In a crucial way, it also provides smaller firms with a simple way to determine if the new alternative minimum tax applies to them.
Key Points:
The Internal Revenue Service has released Notice 2023-07PDF, which offers interim guidance on the implementation of the new corporate alternative minimum tax. The CAMT is a 15% minimum tax on the adjusted financial statement income of major firms for taxable years beginning after December 31, 2022.
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