CAMT Ontology — Corporate Alternative Minimum Tax Concept Map

What Is the Corporate Alternative Minimum Tax?

The CAMT (Corporate Alternative Minimum Tax) is a 15% minimum tax on adjusted financial statement income (AFSI) for corporations with average AFSI exceeding $1 billion. Enacted by the Inflation Reduction Act of 2022, CAMT applies to tax years beginning after December 31, 2022.

Core CAMT Concepts

The CAMT framework is built on several interconnected concepts.

• AFSI (Adjusted Financial Statement Income) — Starting point is GAAP net income from applicable financial statements, adjusted per IRC §56A
• Threshold Test — $1B average AFSI over 3 prior tax years determines applicable corporation status
• Tentative Minimum Tax — 15% of AFSI after all adjustments, minus CAMT foreign tax credit
• CAMT Liability — Tentative minimum tax minus regular corporate income tax; due if CAMT exceeds regular tax
• CAMT Credit — Excess CAMT paid carries forward as a credit against regular tax in future years

AFSI Adjustments Under IRC §56A

Book income is modified by specific adjustments to arrive at AFSI.

• Depreciation Adjustment — Replace book depreciation with tax depreciation for property placed in service after 2022
• FSNOL Deduction — Financial Statement Net Operating Loss limited to 80% of AFSI
• CFC Adjustment — Include proportionate share of applicable CFC financial statement income
• Partnership Adjustment — Adjust for book/tax differences in partnership income
• Covered Transaction Adjustments — Modifications for certain related-party transactions

Interaction With Regular Tax and Pillar Two

CAMT does not replace the regular corporate income tax — it creates a floor. Companies subject to both CAMT and OECD Pillar Two GloBE rules must coordinate calculations carefully, as CAMT paid may qualify as a Covered Tax for Pillar Two purposes, reducing top-up tax exposure.