The Inflation Reduction Act's Corporate AMT: Who Is In Scope and What the 15% Floor Means for Tax Planning

What the law does

Beginning with tax years after December 31, 2022, certain corporations with average annual adjusted financial statement income above the statutory threshold may owe a 15% minimum tax on that income base.

This is not a return to the pre-2018 AMT framework. It is a new regime built around financial statement income rather than purely taxable income.

Why this matters

A corporation can have substantial deductions, credits, or timing benefits under the Code and still face a minimum tax issue if its financial statement income remains high enough.

That means planning now has to consider:

• tax-book differences
• financial reporting treatment
• credit interaction
• group-level income measurement

Who should pay attention immediately

• large corporate groups
• acquisitive businesses
• corporations with major book-tax timing differences
• companies relying heavily on deductions that do not reduce AFSI the same way they reduce taxable income

Planning implications

Financial statement income now matters more to tax planning

The tax function can no longer treat audited financial statement outcomes as adjacent but separate from tax liability analysis.

Timing decisions may change

Transaction timing, depreciation profiles, and credit usage should be revisited with the new minimum-tax framework in mind.

Group complexity will matter

Corporate groups should start identifying where aggregation and financial statement treatment may create unexpected exposure.

Immediate next step

The right move is not to guess. It is to model.

Companies likely to approach the threshold should begin scenario work now using current and projected financial statement income, expected deductions, and major timing items.