IRS Grants Limited Relief for Estimated Payments of CAMT Liability

The IRS on April 15 released guidance (Notice 2024-33) providing a waiver of penalties for underpayments of estimated income tax attributable to the corporate alternative minimum tax (CAMT). 

The Inflation Reduction Act of 2022 created the new CAMT for taxable years beginning after December 31, 2022. Previous administrative guidance (Notice 2023-42) provided a waiver of penalties for underpayments of CAMT liability for tax years beginning after December 31, 2022, and before January 1, 2024. 

The relief provided by Notice 2024-33 is limited to the penalty that would otherwise apply to the nonpayment of estimated income tax attributable to the portion of the CAMT liability due on the date the notice was released (or, in the case of a fiscal year taxpayer with a taxable year beginning in February 2024, on May 15, 2024). To benefit from this waiver, affected taxpayers must file Form 2220 with their federal income tax return. 

The notice is intended to defer potential estimated tax deficiency penalties related to the CAMT until such time as regulations are proposed that clarify some existing ambiguities in its application and calculation. These regulations are expected in the next few months.