Entity Setup
Corporate Alternative Minimum Tax (CAMT): What Entities Need to Know Now
With new interim guidance from Notice 2026-7, corporations with large financial statements face evolving CAMT rules; here’s how to assess liability and plan.
By NomadicTax Research Team • 6-8 min read • March 14, 2026
## What Is CAMT?
The **Corporate Alternative Minimum Tax (CAMT)** is a 15% minimum tax on large corporations’ “adjusted financial statement income” (AFSI), enacted under the **Inflation Reduction Act** (for tax years beginning after Dec 31, 2022). Applies to corporations with average financial statement income over $1 billion. ([bakermckenzie.com](https://www.bakermckenzie.com/en/insight/publications/2026/02/united-states-irs-regulatory-rollback-one-year-in?utm_source=openai))
## Latest Guidance: Notice 2026-7
- Issued in **Internal Revenue Bulletin No. 2026-11** on **March 9, 2026**. It provides interim guidance on how CAMT applies, pending final regulations. ([irs.gov](https://www.irs.gov/pub/irs-drop/n-26-07.pdf?utm_source=openai))
- Helps clarify the calculation of AFSI, adjustments for federal income tax credits, consolidated return group issues, and underpayment penalties. ([bakermckenzie.com](https://www.bakermckenzie.com/en/insight/publications/2026/02/united-states-irs-regulatory-rollback-one-year-in?utm_source=openai))
## CAMT Key Considerations for Corporations
- **Determine if you're an applicable corporation**: average financial statement income exceeding $1B over a testing period. If yes, CAMT likely applies.
- **AFSI calculation**: includes income per financial statements, adjusting for certain items like credits, deductions, and items included or excluded under CAMT rules. Notice 2026-7 updates some methods. ([irs.gov](https://www.irs.gov/pub/irs-drop/n-26-07.pdf?utm_source=openai))
- **Consolidated vs. stand-alone status**: If you belong to a consolidated group, CAMT rules may treat your entity and group differently for liability. Guidance helps clarify this for 2025 returns.
- **Avoiding penalties**: Underpayment penalties related to CAMT are being addressed—certain exemptions or relief may apply if following interim guidance.
## Action Plan for Corporations
- Review your audited financial statements—check revenue, expense recognition, and credits used, since they affect your AFSI.
- Work with accounting and tax teams to model CAMT liability under current interim guidance to estimate possible tax exposure.
- Monitor Treasury/IRS rulemaking: proposed regulations expected; Interim rules may be updated.
- Consider timing of recognizing income and credits to optimize CAMT impact.
**Bottom line:** CAMT is complex and evolving. Entities over the $1B threshold need purposefully assess their operations under current interim guidance and prepare for rules to firm up.