Tax Planning
Navigating the New CAMT Rules Under the One, Big, Beautiful Bill
Large corporations face important changes under the **Corporate Alternative Minimum Tax (CAMT)**—key rulings clarify how income is measured and when interim guidance applies.
By NomadicTax Research Team • 5-8 min read • March 25, 2026
## Overview of the CAMT Shift
The One, Big, Beautiful Bill (Public Law 119-21), effective for taxable years beginning after 2022, introduced the Corporate Alternative Minimum Tax (CAMT). Its goal: ensure large corporations pay a minimum tax by modifying how *Adjusted Financial Statement Income* (AFSI) is calculated. Recent guidance from the IRS sheds light on previously uncertain areas. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
## Key Clarifications from IRS Notice 2026-7
- **AFSI adjustments**: Corporations must now make specific adjustments when moving from book income to CAMT base—such as disallowing or adding back certain deductions or income items that were included (or excluded) on financial statements. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
- **Rules for financially troubled companies**: Different rules apply when corporations are in financial distress. Certain reliefs or exception paths may be available under specific thresholds. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
- **Anti-abuse transactions involving intangibles**: Deals involving cross-border transfers or licensing of intangible property—especially those under section 367(d)—face rigorous testing to prevent tax base erosion. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
## Practical Implications & Examples
**Scenario**: TechCo earns significant revenue from foreign licensing of its software; it has intangible assets and did extensive cost sharing overseas.
- Under CAMT, TechCo’s income, deductions, and transfers related to those intangibles must meet stricter criteria, or adjustments may be required—increasing its tax liability.
- TechCo must also look back at how it designated intangibles and whether any “substantial transformation” under section 367(d) was accounted for appropriately. Failing to do so could trigger reclassification or recapture of income. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
## Action Steps for Corporations & Tax Advisors
- **Review your financial statements**: identify items that differ significantly from tax treatment—look for items that will be added back or disallowed under CAMT guidance.
- **Intangibles strategy**: audit past intangible property transactions to verify if transfers or licenses fall under section 367(d) or could be subject to anti-abuse adjustments.
- **Good faith interim use**: while final regulations are not yet issued, the IRS allows reliance on current interim guidance *if followed in full*—this helps avoid surprises when rules go into full effect. ([irs.gov](https://www.irs.gov/irb/2026-11_IRB?utm_source=openai))
- **Model tax impact**: run pro forma CAMT calculations under the new rules to anticipate changes in tax payable, cash flow, and planning strategy.
## Takeaway
The recent IRS updates under the One, Big, Beautiful Bill make it clear that the era of loosely distinct book vs tax income for large corporations is ending. Firms with complex financial statements—especially those involved in intangible property transactions—must shift gears: tighten documentation, model CAMT liability, and align internal accounting to capture required adjustments.
**Want to go deeper?** Examples of CAMT-driven adjustments include deferred revenue, expenses capitalized for book but deducted sooner for tax, or intangible royalty income recognized differently under book vs tax. Adjusting those will be central in your planning this year.