If a taxpayer paid the Alternative Minimum Tax (AMT) in a previous year but was not required to pay the AMT for the current tax year, they can claim a tax credit towards their tax return. It can either reduce their tax due to the IRS or increase their refund.
The credit is figured on Form 8801. You can use this form:
- If you had an AMT liability for deferral items such as depreciation or incentive stocks that were not sold
- To calculate the minimum tax credit
- To calculate the amount you can carry over to future years
Even if the taxpayer cannot claim the credit, filing Form 8801 allows them to carry the credit forward.