Hi, tax experts,
My previous year filing status is MFJ and we have some AMT credits carried over due to previous ISO exercise. In this year we can use the credits but we are considering MFS which can reduce state tax in our condition. In this case, can my spouse use the AMT credit that we carried over last year?
If yes, how do we report 8801 and split the credit carry overs if both of us can use the credit in this year?
If you are in a community property state (Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington or Wisconsin) then you will use form 8958 and allocate your income and relevant expenses using that form in order to divide things between you equally.
If you are in any of the other states then you will just cut the amounts of any joint income or expenses in half and enter them on the separate returns.
@RobertB4444 Thanks for the answer and I live in a community property state. I understand that 8958 can allocate / distribute incomes. But does the form cover things like prior year AMT credit carry over as well?
Yes. In TurboTax search "Community Property Worksheet" and use the "jump to" link. You will eventually arrive at a page for "Other miscellaneous items" where you can divide all items not specifically handled earlier in the worksheet pages.
Hi,
The method suggested (in 2024 for 2023 tax filing) no long works in TurboTax for 2024 tax filing. The software simply adds the carried forward credit as income.
Any updated the solutions?
Thank you!
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: