Thomson Reuters reports that corporations navigating the new corporate alternative minimum tax (CAMT) now have the option to calculate their liability using a simplified method for tax year 2025, according to interim guidance released by the IRS last week.

Notice 2025-27 responds to concerns from taxpayers and industry professionals that the proposed CAMT regulations issued last September were too complex and burdensome to implement quickly. The optional method aims to reduce compliance costs while Treasury finalizes the full regulatory framework.

The CAMT was enacted under the Inflation Reduction Act and applies to corporations with average annual adjusted financial statement income (AFSI) above certain thresholds. The simplified method temporarily replaces the standard $1 billion and $100 million AFSI thresholds with $800 million and $80 million for general corporations and foreign-parented multinationals. 

Under the CAMT framework, affected corporations must calculate their tentative minimum tax as 15 percent of their AFSI, reduced by a CAMT-specific foreign tax credit. The tax applied only if that amount exceeds their regular corporate tax liability. 

The IRS will also waive the estimated tax penalty under Section 6655 related to CAMT liability for 2025, offering some administrative breathing room. The agency emphasized that use of the simplified method won’t affect a taxpayer’s standing under the reliance rules of the proposed regs. 

The IRS intends to incorporate the simplified method into revised regulations and update instructions for Forms 4626, 1120, and 2220.