Tax-exempt organizations don’t need to file Form 4626 for tax year 2023
Internal Revenue Service (IRS) sent this bulletin at 10/29/2024 01:42 PM EDT
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Tax-exempt organizations don’t need to file Form 4626 for Tax Year 2023 The Inflation Reduction Act of 2022 created an alternative minimum tax for corporations (CAMT) beginning in 2023 of 15% minimum tax on the adjusted financial statement income (AFSI) of corporations that have average annual AFSI greater than $1 billion. For tax-exempt organizations, the CAMT applies only to the AFSI of any unrelated trades or businesses.
In Notice 2023-7 and in the proposed regulations published Sept. 13, 2024, Treasury and the IRS provided a simplified method for determining whether a corporation is an applicable corporation, but this method did not take into account the specific AFSI adjustment provided by the statute for tax-exempt organizations. Comments on the proposed regulations are due Dec. 12, 2024. To give taxpayers and the IRS time to consider the comments on the proposed regulations, including comments relating to reporting for tax-exempt entities and on the application of the simplified method for tax-exempt entities, tax-exempt organizations are exempted from the obligation to file Form 4626, Alternative Minimum Tax – Corporations PDF, for tax year 2023. However, any tax-exempt organization that is liable for the CAMT must pay the tax and report the amount on Part II, Line 5 of Form 990-T, Exempt Organization Business Income Tax Return.
Tax-exempt organizations should maintain Form 4626 in their books and records for purposes of documenting if they are an applicable corporation for purposes of the CAMT and for determining any CAMT liability.
Free online training for Section 501(c)(3) charities The IRS provides interactive online training to help officers, board members and volunteers maintain your organization’s tax-exempt status. The Virtual Small to Mid-Sized Tax-Exempt Workshop at StayExempt.irs.gov is an important resource for all charities, old and new. For the latest exempt organization news, connect via IRS Social Media and subscribe to this and other IRS Newsletters. If you have a technical or procedural question about Exempt Organizations, visit the Charities and Nonprofits homepage on IRS.gov. If you have a specific question about exempt organizations, please contact us. Please do not reply to this message. |
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