Entity Setup
Navigating the CAMT: Interim Guidance for Corporations Under the Corporate Alternative Minimum Tax
For large corporations, the CAMT has introduced significant changes—recent interim guidance clarifies adjusted financial statement income, deductions, and how to comply until final regulations arrive.
By NomadicTax Research Team • 5-8 min read • March 12, 2026
## What is the Corporate Alternative Minimum Tax (CAMT)?
Introduced under the **Inflation Reduction Act** and enacted by the One, Big, Beautiful Bill, CAMT applies to “applicable corporations”—essentially large C-type corporations whose average annual **adjusted financial statement income (AFSI)** meets certain thresholds. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-11.pdf?utm_source=openai))
## Key Updates from Notice 2026-7
- Clarifies adjustments to **AFSI**, especially regarding **deductible tax repairs** included in financial statements tied to Section 168 property. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-11.pdf?utm_source=openai))
- Provides anti-abuse rules for transfers involving intangible property, among other transactions. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
- Offers clarity on **applicability dates** and when taxpayers can rely on interim guidance vs final regulations. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
## What Corporations Need to Do Now: Actionable Steps
1. **Determine whether your entity qualifies** as an “applicable corporation” under §§55, 56A, 59 (excluding S-corps, REITs, etc.). Gather past financial statements. ([irs.gov](https://www.irs.gov/pub/irs-irbs/irb26-11.pdf?utm_source=openai))
2. **Review past AFSI** and see how adjustments (repairs, depreciation, etc.) affect taxable base.
3. **Implement consistent accounting practices**, especially around tax vs financial income differences. These may affect AFSI and the CAMT calculation.
4. **Document transactions involving intangible property** and changes thereof to avoid unexpected adjustments or anti-abuse implications.
5. **Prepare for final regulations**: keep up to date with proposed regulations, comment periods, and ensure compliance with interim guidance.
## Example Scenario
**Company A** is a manufacturing C-corporation with average AFSI over the threshold in two consecutive years. They have expenses treated differently for tax and financial reporting in 2024 for repair vs capital improvements. Under interim guidance in Notice 2026-7, they adjust their financial statement income to include certain deductions that are only allowed on the tax side—or vice versa—to accurately compute AFSI. When final regulations arrive, some items may align differently, so it’s essential to maintain documentation of your positions.
## Implications for Entity Structure & Strategic Planning
- Entities near thresholds might want to reconsider whether their structure exposes them to CAMT.
- Internal forecasting must include CAMT impact for large investments, financing, and intangibles.
- Tax departments should team closely with financial accounting to align reporting to maximize compliance and minimize surprises.
**Bottom line**: CAMT is here. While final rules are pending, Notice 2026-7 equips corporations with needed clarity—use it to adapt systems, accounting, and strategic planning.