Until proposed regulations are released, the Treasury Department and the Internal Revenue Service have published Notice 2023-20PDF, which offers insurance firms and a few other taxpayers temporary guidance on the new corporate alternative minimum tax (CAMT).

The CAMT, which levies a 15% minimum tax on the adjusted financial statement income of major firms for taxable years beginning in 2023, was established by the Inflation Reduction Act of 2022. The taxpayers who are typically impacted by the CAMT are large firms, including insurance companies, with average annual adjusted financial statement income above $1 billion. To give insurance companies and some other taxpayers clarity, the Treasury Department and the IRS have published Notice 2023-20.

Notice 2023-20, in particular, offers interim guidance for calculating adjusted financial statement income with respect to (1) variable contracts and similar contracts, (2) funds withheld reinsurance and modified coinsurance agreements, and (3) the basis of specific assets held by specific previously tax-exempt entities that have received a “fresh start” basis adjustment.

Also, Notice 2023-20 requests feedback on the notice’s rules as well as a few other matters. Such comments should be filed by April 3, 2023, according to the Treasury Department and the IRS.

(Source Credit: This article was originally published by irs.gov: news on February 17th, 2023.)