Form 8801 – Prior Year Minimum Tax Credit

Form 8801

IRS Form 8801

If you paid Alternative Minimum Tax, otherwise known as AMT, in prior years, then this article is of importance to you. You may be eligible for a tax credit for AMT paid in the prior year.

As you may know, Form 6251, Alternative Minimum Tax – Individuals, is one of two main forms used for AMT. The other being Form 8801.

Form 8801 is used to calculate your Minimum Tax Credit for AMT that you incurred in prior tax years and to figure any credit carryforward.

Credit For Paying The AMT

Two types of adjustments and preference items cause the AMT: deferral items and exclusion items.

Deferral items, such as depreciation, generally do not cause a permanent difference in taxable income over time.

However, exclusion items such as the standard deduction do cause a permanent difference.

The distinction is important as the minimum tax credit is allowed only for the AMT caused by deferral items. Only deferral items can generate credit for future years, as opposed to exclusion items, which are not deductible for AMT and as a result are lost.

To calculate and report the Prior Year Minimum Tax Credit, Form 8801, Credit for Prior Year Minimum Tax – Individuals, Estates and Trusts will need to be prepared and filed.

If you would like a quote for the preparation of your individual tax return including Form 8801, please click on the button below for a free, no-obligation Tax Preparation quote and/or free 30-minute consultation to discuss your situation further:

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