The Treasury Department and the IRS on Oct. 23 granted tax-exempt organizations a filing exception. The agencies said these organizations are not required to file Form 4626, Alternative Minimum Tax-Corporations, for tax year 2023. 

The Inflation Reduction Act of 2022 established an alternative minimum tax (AMT) for corporations, a 15% minimum tax on the adjusted financial statement income (AFSI) of corporations with an average annual AFSI exceeding $1 billion, starting in 2023. For tax-exempt organizations, the corporate alternative minimum tax applies only to the AFSI of unrelated trades or businesses. 

Tax-exempt organizations must maintain Form 4626 in their books and records to document whether they are an applicable corporation for purposes of the alternative minimum tax and, if so, to determine any corporate alternative minimum tax liability.  

Additionally, any tax-exempt organization liable for the AMT must pay the tax and report the amount on Part II, Line 5 of Form 990-T, Exempt Organization Business Income Tax Return. 

In Notice 2023-7 and the proposed regulations released on Sept. 13, the agencies offered a simplified method for determining whether a corporation is an applicable corporation. However, this method needed to consider the specific AFSI adjustment provided by the statute for tax-exempt organizations. Comments on the proposed regulations are due Dec. 12. 

To give taxpayers and the IRS time to examine the comments on the proposed regulations, including those related to reporting for tax-exempt entities and on the application of the simplified method for tax-exempt entities, tax-exempt organizations are exempt from the obligation to file Form 4626 for the 2023 tax year.