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Last Updated: 6/14/2018

Alternative Minimum Tax

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Alternative Minimum Tax (AMT) is meant to ensure that anyone who benefits from certain tax advantages pays a minimum amount of tax.

How does the department determine AMT?

The Minnesota Department of Revenue determines if you owe AMT by comparing your “regular income” (normal tax calculation) to your “AMT income” (normal tax calculation with certain deductions added back). We compare your tax on your regular income and AMT income using Schedule M1MT, Alternative Minimum Tax. You must pay whichever tax amount is higher.

Do I have to file and pay Minnesota AMT?

You may need to file and pay Minnesota AMT even if you did not have to pay federal alternative minimum tax. Common reasons for this include any of the following:

  • You claim large gambling losses as deductions on federal Schedule A.
  • You claim a large home mortgage interest deduction on federal Schedule A.
  • You claim a large amount of state or local taxes (such as income, sales, or property) on federal Schedule A.
  • You claim large amounts of employee business expenses on federal Schedule A.
  • You claim a large number of exemptions.
  • You take the standard deduction and claim large exemptions or income subtractions not allowed on your state return.

Complete Schedule M1MT to determine if you must pay Minnesota AMT. If you filed your federal income tax return with federal Form 6251, you will need that form to complete Schedule M1MT.

What is Minnesota’s AMT rate?

Beginning with tax year 2013, the rate is 6.75 percent. For tax years 2012 and earlier, the rate was 6.4 percent. See Minnesota Statute 290.091.

What if I had to pay Minnesota AMT in a prior year, but not the current year?

You may qualify for a nonrefundable credit. For more information, see Alternative Minimum Tax Credit and Schedule M1MTC, Alternative Minimum Tax Credit.