Your spouse can take the prior year AMT credit when switching from Married Filing Jointly (MFJ) to Married Filing Separately (MFS), but there are specific rules and considerations to keep in mind:
- Community Property States: If you live in a community property state, you need to use Form 8958 to allocate income, deductions, and credits between spouses. This form helps divide items like the AMT credit appropriately. If you live in a community property state, this AMT credit needs to be allocated 50/50.
- TurboTax Settings: TurboTax may handle the AMT credit differently depending on the filing status and software version. You might need to manually adjust the allocation or consult the software's help section for guidance.
- IRS Guidelines: The IRS allows AMT credits to be carried forward and used, but the allocation must follow specific rules when filing separately. Ensure that the credit is reported accurately on Form 8801 for both spouses
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