IRSFinal Rule

Excise Tax on Repurchase of Corporate Stock; Correction

Finance & BankingOther

Summary

This regulation corrects rules about a new tax that large corporations must pay when they buy back their own stock. The tax was created to fund government programs, and this update fixes technical errors in how the tax is calculated and applied.

Key Points

  • 1Applies to corporations that repurchase (buy back) their own stock worth $1 million or more in a single quarter
  • 2Imposes a 4% federal tax on the total value of stock repurchases to discourage companies from using profits for buybacks instead of reinvestment
  • 3Corrects administrative errors and clarifies how the tax rules work for different types of stock transactions
  • 4Affects large publicly-traded companies but not small businesses or individual investors
  • 5Revenue from this tax helps fund government spending on healthcare, climate, and deficit reduction

Key Dates

Published

February 11, 2026

This summary is for informational purposes only. It may not capture all nuances of the regulation. Always refer to the official text for authoritative information.

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