The IRS and Treasury have issued final regulations that provide taxpayers and tax professionals with guidance on reporting and paying the 1% excise tax owed on corporate stock repurchases.
The Inflation Reduction Act imposed a new excise tax on stock repurchases equal to 1% of the aggregate fair market value of stock repurchased by certain corporations during the taxable year, subject to adjustments. The excise tax applies to repurchases after Dec. 31, 2022.
The final regulations require taxpayers to report the stock repurchase excise tax on Form 720, Quarterly Federal Excise Tax Return, due for the first full calendar quarter after the end of the corporation’s taxable year, with Form 7208, Excise Tax on Repurchase of Corporate Stock, attached. Learn more.