Most people don't realize that the Alternative Minimum Tax is calculating all the time behind the scenes in their return. Part of the calculation is an amount called Tentative Minimum Tax and this amount limits many nonrefundable credits. It is the amount beyond which you would owe AMT if you were to take the full amount of a nonrefundable credit.
If your credit is limited by Tentative Minimum tax, as is the Alternative Vehicle Refueling Property credit, then you cannot take any credit amount that would result in in AMT. You would only end up with the dollar for dollar increase in AMT for every dollar of decrease in regular tax, leaving no net effect on your tax liability calculation.
People read the limit on the credit as meaning they cannot take it in full if they are paying AMT, so they check line 45 of their 1040 and, if no AMT is showing, they believe AMT cannot be the reason for the credit being limited. The real number that matters, though is on line 33 of the 6251, the Tentative Minimum Tax. This is the number that limits refundable credits and is the reason no AMT appears on the 1040.
