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Alternative Minimum Tax Credit
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You may qualify for the Minnesota Alternative Minimum Tax (AMT) Credit if you had to pay Minnesota AMT in a prior year, but not the current year.
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To qualify, part of the difference between your prior year regular income and AMT income must have been due to timing items as opposed to exclusion items.
Generally, you will not qualify for this credit unless you previously had to pay the federal AMT and you qualify for the federal AMT credit in the current year. For details, see the instructions for federal Form 8801 on the Internal Revenue Service website.
Timing items do not cause a permanent difference between regular income and AMT income. They occur when you must defer a deduction or other tax benefit for your AMT income calculation. You may claim an AMT credit for timing items when your AMT no longer exceeds your regular income tax.
Timing items include federal AMT preferences or adjustments, such as:
- Depreciation
- Depletion
- Intangible drilling costs
- Passive activity losses
- Incentive stock options
Exclusion items cause a permanent difference between your regular income and AMT income. Exclusion items are deductions, exemptions, or income subtractions not allowed when calculating and paying AMT.
Exclusion items include:
- Personal exemptions
- Non-Minnesota municipal bond interest
- Deductions for gambling losses, home mortgage interest, taxes, and miscellaneous itemized deductions
For details, see Minnesota Statute 290.091, subdivision 6.