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Last Updated: 9/5/2017

Alternative Minimum Tax Credit (Schedule M1MTC)

You may qualify for the Minnesota Alternative Minimum Tax (AMT) Credit if you had to pay the state AMT in the prior year, but not the current year. In most cases, you won’t 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 (See “Nonrefundable Credit for Prior Year Minimum Tax at a Glance” on the IRS website.)
 

Eligibility

Only a small percentage of taxpayers who paid AMT in a prior year are eligible for the Minnesota AMT Credit. To qualify, at least part of the difference between your “regular” and AMT income in the prior year must have been due to “deferral items.” But most taxpayers who paid the Minnesota AMT did so because of “exclusion items.”
 

Deferral Items

Deferral items don’t cause a permanent difference between “regular” and AMT income. They occur when you must defer a deduction or other tax benefit for the calculation of AMT income. You may claim an AMT credit for deferral items when your AMT liability no longer exceeds your “regular” tax liability. Deferral items include federal AMT preferences or adjustments such as depreciation, depletion, intangible drilling costs, passive activity losses, or incentive stock options.
 

Exclusion Items

Exclusion items cause a permanent difference between your “regular” and AMT taxable income. Exclusion items are deductions, exemptions, or income subtractions that aren’t allowed when calculating and paying AMT. They include personal exemptions, non-Minnesota municipal bond interest, and deductions for gambling losses, home mortgage interest, taxes, and miscellaneous itemized deductions.
 
 

How to Claim