Claiming AMT credit – CPA says no

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    We live in California and have high income.

    All the past years we have been paying AMT. Due to new tax laws and cap on california state taxes, this year we do not pay AMT. I told my CPA that we should be able to use AMT taxes as credit this year. He said his tax software didn’t even ask him to try AMT.

    Anyone has similar situation. I can’t figure out if the new tax laws changed AMT in some way…


    • This topic was modified 2 years, 10 months ago by rm1140.

    It might be worth reviewing the 2018 versions of IRS Form 8801 and Instructions.

    “Complete Form 8801 if you are an individual, estate, or trust that for 2017 had:

    1. An AMT liability and adjustments or preferences other than exclusion items,
    2. A credit carryforward to 2018 (on 2017 Form 8801, line 26), or
    3. An unallowed qualified electric vehicle credit (see the instructions for line 20).

    File Form 8801 only if line 21 is more than zero.”

    Kaye Thomas

    The things that cause you to pay AMT are divided into two categories: exclusion items and other items. You get to claim AMT credit only if your AMT was caused by other items, which include depreciation adjustments and incentive stock options. If you haven’t had these types of adjustments, but were paying AMT because of a large itemized deduction for state and local taxes (an exclusion item), you aren’t eligible for AMT credit. And, by the way, if you are eligible, for example because you exercised an incentive stock option years ago, you should have been filing Form 8801 each year beginning with the year after you exercised the option.

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