Tax insight

Simplified CAMT rules offer relief on broad range of issues

Insight
10 minute read
October 10, 2025

What happened?

Treasury and the IRS have released Notice 2025-46 and Notice 2025-49, providing interim guidance that significantly simplifies the application of the Corporate Alternative Minimum Tax (CAMT). These notices address a wide array of technical and compliance issues raised by commentators in response to the complexity of proposed regulations issued last year. The new guidance clarifies the treatment of domestic corporate transactions, financially troubled companies, and consolidated groups, in addition to introducing several new adjustments to the computation of adjusted financial statement income (AFSI).

Why is it relevant?

Changes made by the One Big Beautiful Bill Act (the Act) have expanded the reach of the CAMT, making it more likely that companies will be subject to significant CAMT liabilities. The notices update applicability dates and reliance rules, providing flexibility for companies to apply the interim guidance before publication of final regulations – see the Appendix at the end of the article for details. In the notices, Treasury and the IRS state their intention to issue a revised set of proposed regulations that will be consistent with rules set forth in the interim guidance, as well as to partially withdraw the proposed regulations.

Actions to consider

Immediate deductions of domestic research or experimental (R&E) expenditures, increased deductions for interest expense, and large bonus depreciation deductions inadvertently can trigger liability for the CAMT or the base erosion and anti-abuse tax (BEAT). Companies should incorporate the impact of the new options provided by these notices in their models to determine whether to apply the interim guidance or specific sections of the proposed regulations prospectively, and how to document and report their selected approach. Additionally, taxpayers should consider submitting comments to provide input on future guidance by December 1, 2025, although comments submitted after this deadline also will be accepted.