We filed jointly last year and paid AMT $1375. Can we file separately this year and have the one with lower income claim all the AMT credit? If not, how should we split?

[dingli-crystal]

We tried filing jointly and separately this year to see which can save us more money. And we find when we file separately, TurboTax seems to apply all the AMT credit to one of us, while when we file jointly, we can't use all the credits, so overall we are paying more taxes. I was wondering if this is something we can do?

[KarenJ]

Did you have any timing issues in prior years such as the exercise of ISOs or a depreciation difference on Form 6251?

[dingli-crystal]

Hello! Thanks for your reply. We didn’t have any timing issues. We are simple W2 salary makers with no investments. Thanks.

[KarenJ]

Did TurboTax automatically give your the credit or did you enter your prior year 6251 numbers into TurboTax.  Did you have a Form 8801 last year or this year?

[dingli-crystal]

We entered prior year 6251 numbers into turbotax. We indicated we were filing jointly for last year. We don’t have a form 8801 for last year, not sure about this year because we haven’t filed yet.

[KarenJ]

TurboTax should not be giving you this AMT credit.  May I ask you if you are sure you entered the numbers from your 2017 Form 6251 correctly?

[dingli-crystal]

Yes. We both checked it. The only complication here is we were filing jointly last year and we are trying to file separately in the software right now. Can you tell me how the credit works? Do we have to keep the same filing status to claim the credit? Or one of us can claim half of last year’s credit at most?

[KarenJ]

From what you have told me you cannot take the AMT credit on your tax return. I don't know if it is a software issue.  Would you be able to tell me what lines on your form 6251 had an amount listed?  In TurboTax it asks you complete line 1-10 and line 12,13,27 ,34 and 35.  Which of these lines had an amount listed?

[dingli-crystal]

We had values on line 1, 3, 7, 34 and 35. Thanks.

[KarenJ]

Thank you.  Just because you paid AMT last year, does not mean that you can claim a credit for the AMT you paid last year.  You can only claim an AMT credit for timing or deferral items that caused you to be in AMT in a prior year.  Timing or deferral items are typically caused by the exercise of incentive stock options or depreciation difference.

As you did not have timing differences, you should not be taking a AMT credit.

[dingli-crystal]

Thank you for the explanation. Very helpful!