On my 2013 Form 8801 line 19 was entered $209,510, which was said to be "2012 credit carryforward from your 2012 Form 8801, line 28." However on my 2012 Form 8801 Line 28 was blank. I am unable to find the source of that entry in 2013, and I believe this entry in 2013 was erroneous. It has been carried forward by TurboTax in subsequent years, reducing by several thousand dollars each year, to $162,751 in 2019. 2019 has been audited by IRS and resulted in penalties.
Is there any other explanation for the 2013 entry? If not, and if it was an error, how can I remove it in this and subsequent year returns.
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The issue here is a credit for an Alternative Minimum Tax (AMT). If you have a year in which you pay an AMT due to timing differences, you can get a credit for it in a future year. Somehow such a credit was populated on your tax return and carried forward and used evidently over several years.
To remove it, you need to go to the Estimates and Other Taxes Paid section in TurboTax, under Deductions and Credits, and select Credit for AMT Paid in Prior Years. There, you will see a screen that says Tell us about your 2020 tax return, and you will see an option to change the carryover AMT credit as listed on your 2020 tax return form 8801.
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