The Inflation Reduction Act created the corporate AMT, which imposes a 15% minimum tax based on book income rather than taxable income on corporations with adjusted financial statement income (AFSI) of more than $1 billion beginning after Dec. 31, 2022. The Treasury Department estimates that approximately 100 of the largest U.S. corporations will pay the corporate AMT annually.
The IRS has issued proposed regulations (REG-112129-23) this month addressing how to apply the Sec. 55 corporate alternative minimum tax (AMT) as amended by the Inflation Reduction Act of 2022, P.L. 117-169. They also issued a notice further delaying the application of the penalty for failure to pay estimated tax with respect to the corporate AMT.
These proposed regulations provide guidance on determining if a corporation is subject to the corporate AMT, which includes rules for members of a foreign-parented multinational group and the determination of the corporate AMT foreign tax credit. The regulations also provide definitions and general rules for determining and identifying adjusted financial statement income (AFSI) and rules regarding certain statutory and regulatory adjustments in determining AFSI.
Also, the proposed regulations address the application of the corporate AMT to affiliated corporations filing a consolidated income tax return..
Written or electronic comments on the proposed regulations must be received by Dec. 12, 2024. A public hearing on the proposal is scheduled for Jan. 16, 2025.
Penalty waiver for 2024
The IRS also issued Notice 2024-66, which waives the penalty for a corporation's failure to pay estimated tax with respect to its corporate AMT for a tax year that begins after Dec. 31, 2023, and before Jan. 1, 2025.