BIG TAX CUTS FOR INSURANCE COMPANIES

Author: Neil T. O’Donnell , Founder and Managing Attorney, O’Donnell Law Offices .

As reported recently in The New York Times , the Trump Administration handed out hundreds of billions of dollars in tax cuts to some of the country’s most profitable insurance companies, crypto companies, and other multi-national corporations.

The Treasury Department and Internal Revenue Service (IRS) , through a series of new notices and proposed regulations, are giving giant tax breaks to insurance companies.

The Administration is rapidly gutting a 2022 law which ensured that the country’s most profitable insurance companies would pay at least some Federal Income Tax. The “Corporate Alternative Minimum Tax” was passed to stop giant corporations, including insurance companies, Microsoft, Amazon, and others, from being able to report big profits to shareholders yet low tax liabilities to the Federal Government.

The 2022 law projected to raise $220 billion over a decade. But the Treasury Department and IRS have issued notices beginning this summer which means the tax could bring in only a fraction of that amount.

These breaks to insurance companies come in addition to the roughly $4 trillion package of cuts enacted by the Administration in July, 2025.

These tax cuts to insurance companies and other large corporations will add trillions of dollars to the federal deficit, and bring steep cuts to healthcare for the elderly and cuts to food stamps for the poorest Americans. By doing it through the Treasury Department, Daniel Hemel , a law professor at New York University, said that:

The Administration “can just give away the goodies to one group, without having to take back anything from another.”

These new regulations provide flexibility for insurance companies in using so-called “tax losses.” The new rules permit some insurers to use those losses to reduce their bills under the minimum tax – even for prior years.

“They’re effectively repealing the statute,” said Monte Jackel , a tax lawyer and former IRS official.

At O’Donnell Law Offices, we stand up to greedy insurance companies every single day. And when you are injured, we will make those insurers pay fair compensation.