Additional Reporting for Corporate Taxpayers in 2024?
Published on by Lauren Huster in International Business, Tax Services
The 2023 tax filing season brought new challenges for corporations navigating additional reporting requirements tied to the Corporate Alternative Minimum Tax (CAMT). In response, the IRS issued guidance to simplify compliance through safe harbor provisions.
2023 tax reporting
Once the 2023 tax filing season arrived it was found that certain corporations were subject to additional reporting requirements for CAMT even though the corporations were not subject to the CAMT. The IRS issued Notice 2023-7 (the “Notice”) to address the application of CAMT and applied a simplified safe harbor to allow certain taxpayers to avoid the burden of this additional reporting requirement.
The Notice stated that the safe harbor would only be applicable to the first taxable year beginning after December 31, 2022.
Tax reporting moving forward
The IRS issued proposed regulations REG-112129-23 (the “Proposed Regulations”) relating to CAMT on September 12, 2024. The proposed regulations provide a new safe harbor method for future tax years and require companies to keep records to support that they meet the safe harbor requirements.
The safe harbor method is allowed when:
- A corporation that is not a foreign parent multinational group (FPMG) has a three-year taxable average adjusted financial statement income (AFSI) that is less than $500 million for its control group, OR
- An FPMG corporation must have:
- The three-year taxable average AFSI that is less than $500 million for its control group, AND
- The three-year taxable average AFSI that is less than $50 million for its US entities.
Not qualifying for the simplified safe harbor method doesn’t mean a corporation will be subject to the CAMT, but it will be subject to disclosure requirements.
Talk to us
Read more on CAMT in our deep dive into reporting and compliance for U.S. taxpayers. If you have any questions on the impact of CAMT, or questions about international tax and how to optimize your tax position, the Barnes Dennig team of top international tax pros is here to help. Contact us today.