Draft form, instructions posted for corporate AMT

The IRS has released a draft form and draft instructions to the form for the corporate alternative minimum tax (AMT).

The seven-page draft Form 4626, Alternative Minimum Tax — Corporations, for the 2023 tax year was posted in December. The draft instructions state that unless a filing exclusion applies, all corporations must file Form 4626 with their tax returns to determine if they are an applicable corporation and, if they are an applicable corporation, calculate their corporate AMT.

The draft instructions provide a safe harbor, simplified method for determining if a corporation is an applicable corporation. Corporations that choose to apply the simplified method and are not an applicable corporation under the safe harbor are not required to file Form 4626 for the first tax year beginning after 2022. Filing exclusions apply to S corporations, regulated investment companies, and real estate investment trusts.

The corporate AMT, created by the Inflation Reduction Act of 2022, P.L. 117-169, imposes a 15% minimum tax based on the adjusted financial statement income (AFSI) of corporations with AFSI over $1 billion, beginning after Dec. 31, 2022. Foreign-parented companies must meet an additional $100 million income threshold.

Certain rules described in the draft instructions are interim rules from notices published in the Internal Revenue Bulletin. Taxpayers are not required to apply those rules but can rely on them for a limited period, including in 2023.

Those notices include:

• Notice 2023-7: Initial Guidance Regarding the Application of the Corporate Alternative Minimum Tax under Sections. 55, 56A, and 59 of the Internal Revenue Code.
• Notice 2023-20: Interim Guidance Regarding Certain Insurance Related Issues for the Determination of Adjusted Financial Statement Income under Section 56A of the Internal Revenue Code.
• Notice 2023-42: Relief from Certain Additions to Tax for Corporation’s Underpayment of Estimated Income Tax under Section 6655.
• Notice 2023-64: Additional Interim Guidance Regarding the Application of the Corporate Alternative Minimum Tax under Sections. 55, 56A, and 59 of the Internal Revenue Code.
• Notice 2024-10: Additional Interim Guidance Regarding the Application of the Corporate Alternative Minimum Tax under Sections 55, 56A, and 59 of the Internal Revenue Code.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.