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Credit for AMT Paid in Prior Year

Home Tax Reduction Credit for AMT Paid in Prior Year

  • Avatar Jane 
    Participant
    Status: Other Professional
    Posts: 14
    Joined: 01/19/2016

    I have been doing my taxes in TurboTax for many years. Starting in 2009, it created form 8801 and started carrying over a large prior year balance (row 19), which is supposed to be a carryover amount from the prior year’s form 8801 line 31. If I open my 2008 taxes (pdf as the program will not run), there is no form 8801. The amount happens to equal the balance from form 6251 row 31. The reason I paid AMT is because of exclusion items, as far as I know. I cannot think of any reason why I would have a credit carryforward. This is the first year I won’t pay AMT. As a result, TurboTax is trying to give me a large credit for AMT paid in prior year. I think I should just zero out the credit carryforward. Thoughts? Am I missing something?

    #189807 Reply
    Avatar Larry Ragman 
    Participant
    Status: Other Professional
    Posts: 543
    Joined: 08/30/2018

    Don’t zero it! This is legit, or at least it makes sense. The credit exists from some item in the past. TT would not let you take it before because it can only be taken in a year you do not owe AMT. Let TT take it for you. That will clear the books.

    #189818 Reply
    Avatar Jane 
    Participant
    Status: Other Professional
    Posts: 14
    Joined: 01/19/2016

    While I’d like to take it, I did not have anything in 2008 or 2009 (or ever) that would qualify as a deferral item. I must have made a mistake when I entered something in TT. The carryover amount is huge and the credit TT is calculating this year would not even get close to clearing it.

    #190007 Reply
    Avatar Larry Ragman 
    Participant
    Status: Other Professional
    Posts: 543
    Joined: 08/30/2018

    Well, all I can say is that the AMT is wierd. I would not assume the credit was wrong. TT has been reporting it since 2009, so I don’t think the IRS is going to question it. If you are personally uncomfortable, perhaps this is the year to have aCPA review the taxes? Or, perhaps contact TT to have their help desk figure out if the credit is valid.

    #190031 Reply
    Liked by ENT Doc
    Avatar Jane 
    Participant
    Status: Other Professional
    Posts: 14
    Joined: 01/19/2016

    I reported this as a possible bug to TurboTax. TT either carried over the wrong amount in 8801 line 19 or I answered one of the TT questions wrong making it do so. Here are a couple articles I found that reference a similar issue.

    https://ttlc.intuit.com/questions/4421425-how-do-i-amend-my-2017-return-to-remove-a-form-8801-tax-credit-that-has-been-carried-over-from-previous-years-was-just-audited-by-irs-for-2016-and-need-to-adjust-2017

    https://blog.taxaudit.com/a-cautionary-tale-about-tax-scams-and-erroneous-claims-for-refund

    #190505 Reply
    Avatar MikeB 
    Participant
    Status: Other Professional
    Posts: 2
    Joined: 04/07/2019

    Jane —

     

    I noted the EXACT same issue that you note when doing my taxes this year. couldn’t figure out why a large credit this year which is first year not paying AMT.  Found same thing as you when looking back over old returns.  The 2009 Federal Carryover worksheet suddenly had a large sum in line 21 and I also realized that it looked like this was imported from line 31 of Form 6251.

     

    Wondering how you ended up resolving this.  Like you, I don’t think I meet eligibility for the large credit.  I don’t think this has bearing on prior tax returns as I have paid the AMT yearly up til this year.

     

    Thanks,

    Mike

    #204650 Reply
    Avatar Larry Ragman 
    Participant
    Status: Other Professional
    Posts: 543
    Joined: 08/30/2018

    Jane —

     

    I noted the EXACT same issue that you note when doing my taxes this year. couldn’t figure out why a large credit this year which is first year not paying AMT.  Found same thing as you when looking back over old returns.  The 2009 Federal Carryover worksheet suddenly had a large sum in line 21 and I also realized that it looked like this was imported from line 31 of Form 6251.

     

    Wondering how you ended up resolving this.  Like you, I don’t think I meet eligibility for the large credit.  I don’t think this has bearing on prior tax returns as I have paid the AMT yearly up til this year.

     

    Thanks,

    Mike

    Click to expand…

    How large a credit? I had one this year given that I did not have to pay AMT for the first time in years. It was only $3000 or so. But the calculation was absolutely correct. I can trace it back several years. Why are you so sure the credit is not valid?

    #204685 Reply
    Avatar MikeB 
    Participant
    Status: Other Professional
    Posts: 2
    Joined: 04/07/2019

    I looked back to 2008. No credit then.  The following year I had a credit for a “large” amount that made no sense, but was equal to the sum on line 31 of form 6251.  The credit carry forward was supposed to be the amount from line 31 of form 8801.

    That sum carried forward without any further change over the next 6 yrs.  I think it is a software error.

     

    I don’t see that I made any transaction (e.g., stock options) that should have triggered a credit.

     

     

    #204696 Reply
    Avatar MaxPower 
    Participant
    Status: Physician
    Posts: 338
    Joined: 02/22/2016

    We got this credit this year. We have only been paying AMT since 2015. Our return was already accepted by the IRS and we received our refund. No word on an audit, yet…..

    #204705 Reply
    Avatar Larry Ragman 
    Participant
    Status: Other Professional
    Posts: 543
    Joined: 08/30/2018

    Well, you could be right. Software glitches and programming errors happen. But just bear in mind that stock options only one of the categories. For example, mine was deferred depreciation from rental properties. Others include electric vehicle credit, alternative feull credit, and I think a foreign taxable gain credit.  Have you asked TT? I’ve seen lots of TV ads for live help😎

    #204706 Reply

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