Update on the Inflation Reduction Act

The proposed Inflation Reduction Act imposes a new 15% corporate alternative minimum tax on the adjustable financial statement income of certain corporations. The tax will apply if it exceeds the taxpayer’s regular tax, including its base erosion and anti-abuse tax for the tax year. An applicable corporation for a tax year is one that meets an average annual adjusted financial statement income test for one or more tax years that “are prior to such taxable year and end after Dec. 31, 2021.” A corporation meets the income test if its average annual adjusted financial statement income for the three-tax-year period (without regard to loss carryovers) ending with the tax year exceeds $1 billion.

Contact one of our experts with any questions about the Inflation Reduction Act.

Leave a Reply