The Internal Revenue Service has provided interim guidance for insurance companies and certain other taxpayers for the new corporate alternative minimum tax.The guidance is under Notice 2023-20PDF. Comments are being accepted through April 3.
The CMT imposes a 15 percent-minimum tax on the adjusted financial statement income of large corporations for taxable years beginning in 2023. Taxpayers affected by the tax are large corporations, including insurance companies, with average annual adjusted financial statement income exceeding $1 billion.
The provides interim guidance for determining income as it relates to (1) variable contracts and similar contracts, (2) funds withheld reinsurance and modified coinsurance agreements, and (3) the basis of certain assets held by certain previously tax-exempt entities that received a "fresh start" basis adjustment.
