Group Health Plan Requirements
For plan years beginning after 1997, you (or the plan, if a multi-employer
plan) may be subject to an excise tax if your plan does not meet certain
new requirements. These requirements generally do the following.
- Obligate plans to pay for a minimum hospital stay for mothers and
newborns if the plan otherwise provides benefits for hospital stays in
connection with childbirth.
- Prevent certain special limits from being placed on mental health
benefits.
For more information on this excise tax, see chapter 5 in Publication
535.
Alternative Minimum Tax (AMT)
Eliminated for small corporations. For
tax years beginning after 1997, the tentative minimum tax of a small corporation
is zero. This means that a small corporation will not owe AMT.
For information on the corporate AMT, see the instructions for Form
4626, Alternative Minimum Tax-Corporations.
New election for foreign tax credit limit.
You can elect to use a simpler computation for figuring the AMT foreign
tax credit limit. This computation uses regular foreign-source taxable
income, instead of requiring the computation of AMT foreign-source taxable
income. You can only make this election for the first tax year beginning
after 1997 for which you claimed an AMT foreign tax credit. The election
applies to all later tax years unless it is revoked with the consent of
the IRS.
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