If you had depreciation differences for AMT or if you exercised incentive stock options in prior years, you may be eligible for an AMT credit. If this applies to you and you did not receive the AMT credit this year, it is because you are paying AMT this year. You cannot get an AMT credit in a year that you are paying AMT.
Please note that usually your prior year AMT is due to exclusion
items and are not eligible for AMT credit. Please see below
for items eligible for the AMT credit.
This credit,
calculated on Form 8801: Credit for Prior Year
Minimum Tax calculates how much of the AMT was related to deferral items, which
generate credit for future years, as opposed to exclusion items which are not
deductible for AMT, and consequently are lost.
Certain items in Lines 2-28 of the Form 6251 are
simply not deductible for AMT purposes, such as taxes, home equity mortgage
interest and miscellaneous deductions. Lines 2-5, 8-10, 13 and 14 are exclusion
items. If you paid AMT based on entries on these lines, you will not receive a
tax credit for AMT.
Other items create timing differences, such as
depreciation differences between the two tax systems, and the phantom income
from exercising incentive stock options. These items can generate a credit on
Form 8801 and reduce your taxes in future years.
Lines 15-28 are
deferral items. An AMT credit may be generated based on the reversal of the
timing difference of these items. For example, AMT depreciation methods may be
slower than those for the regular tax, but you will eventually receive the same
deduction. To calculate and report your AMT credit you need to fill out Form 8801: Credit for Prior
Year Minimum Tax.
