How does a Nebraska individual recompute the 2000 federal alternative minimum tax to figure the Nebraska minimum tax?

Plain-English summary

Nebraska has its own minimum tax that builds on the federal alternative minimum tax (AMT) — but the federal AMT must be recomputed with Nebraska figures first. This ruling gives individuals the line-by-line method for the 2000 return. (It is the direct predecessor of Revenue Ruling 22-01-1, which does the same for 2001.)

The rule. Under Neb. Rev. Stat. §77-2715, the federal AMT is recomputed by substituting Nebraska taxable income for federal taxable income and adjusting for items treated differently for Nebraska — on Federal Form 6251 or the Form 1040A AMT worksheet, and any schedule feeding them.

The Nebraska adjustments (§77-2716). In redoing the computation you:

• exclude interest or dividends from U.S. obligations (Individual Income Tax Reg 22-002.05A);
• include interest or dividends from non-Nebraska state or local obligations; and
• exclude any non-Nebraska S-corporation or LLC income, along with any preference item derived from that entity.

Recalculate every total or computational line to reflect these adjustments; all other entries stay the same as the federal computation. (For example, tax-exempt interest is limited to Nebraska private activity bonds issued after August 7, 1986, and the regular tax on line 27 is computed on Nebraska Tax Table Income without subtracting any foreign tax credit.)

Where the result goes. Enter line 28 of the recomputed Form 6251 (or line 22 of the recomputed 1040A worksheet) on line 1 of the Nebraska Minimum or Other Tax Worksheet (page 8 of the Form 1040N instructions). That worksheet produces the amount for line 16 of Form 1040N — or, for filers using Nebraska Schedule III, line 64 of that schedule. Attach a copy of the recomputed federal form to the return.

How far back. The alternative minimum tax must be recomputed for all taxable years beginning after December 31, 1978. The Department issues a parallel ruling each year; the immediately preceding years are covered by Revenue Rulings 22-99-1 (1999), 22-98-1 (1998), and 22-97-3 (1997).

What this means for you

An individual who owed federal AMT in 2000

You can't just carry the federal AMT to your Nebraska return. Recompute Form 6251 (or the 1040A worksheet) with the Nebraska adjustments, run the Nebraska Minimum or Other Tax Worksheet, and report the result on Form 1040N line 16 (or Schedule III line 64), attaching the recomputed federal form.

A preparer comparing 2000 and 2001

The mechanics are identical to the 2001 ruling (22-01-1), but the destination line on Nebraska Schedule III moved — line 64 for 2000, line 67 for 2001. Always use the ruling for the exact year rather than reusing a neighboring year's line numbers.

Common questions

Q: Do I owe Nebraska minimum tax just because I owed federal AMT?
A: You recompute the federal AMT with Nebraska adjustments; the recomputed figure drives the Nebraska minimum tax, which can differ from the federal amount.

Q: Which lines carry the result to Form 1040N for 2000?
A: Line 28 of Form 6251 (or line 22 of the 1040A worksheet) → line 1 of the Nebraska Minimum or Other Tax Worksheet → line 16 of Form 1040N, or line 64 of Nebraska Schedule III.

Q: How many years back does this apply?
A: The AMT is recomputed for all taxable years beginning after December 31, 1978.

Citations and references

• Neb. Rev. Stat. §77-2715 — recompute the federal AMT using Nebraska taxable income.
• Neb. Rev. Stat. §77-2716 — the Nebraska adjustments (U.S.-obligation interest, non-Nebraska bond interest, non-Nebraska S-corp/LLC income and preference items).
• Individual Income Tax Reg 22-002.05A — exclusion of U.S.-obligation interest or dividends.
• Form 6251 / Form 1040A AMT worksheet; Form 1040N line 16; Nebraska Schedule III line 64 — the forms and destination lines for 2000.

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/revenue-rulings-issued-tax-commissioner
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr220001.pdf

Original ruling text

REVENUE RULING 22-00-1
December 29, 2000
Individual Income Tax-Computation of 2000 Alternative Minimum Income Tax to Determine
Nebraska Minimum Tax for the 2000 Nebraska Return. ALTERNATIVE MINIMUM TAX-INDIVIDUALS, FEDERAL FORM 6251, AND THE ALTERNATIVE MINIMUM TAX
WORKSHEET, FEDERAL FORM 1040A, ARE TO BE RECALCULATED FOR NEBRASKA
INDIVIDUAL INCOME TAX PURPOSES TO DETERMINE THE NEBRASKA MINIMUM
TAX.
Advice has been requested as to whether the alternative minimum tax computed for a taxpayer’s
2000 U.S. Individual Income Tax Return, Federal Forms 1040 or 1040A, must be recalculated in
order to compute the Nebraska income tax.
Nebraska law imposes a tax on the federal alternative minimum tax recomputed to take into account
the adjustments required by the Nebraska Revenue Act of 1967, as amended. Section 77-2715 of the
Nebraska Revised Statutes provides that the additional taxes shall be recomputed by substituting
Nebraska taxable income for federal taxable income and adjusting the Nebraska alternative
minimum tax calculations for any items which are reflected differently in the determination of
federal taxable income for Nebraska purposes. This applies to any federal schedules or other forms
the results of which are used in calculating the federal alternative minimum tax.
Among the adjustments provided by Section 77-2716 of the Nebraska Revised Statutes are the
exclusion from federal adjusted gross income of interest or dividends from U.S. obligations as set
forth in Individual Income Tax Reg 22-002.05A and the inclusion of interest or dividends from nonNebraska source state or local obligations. Section 77-2716 also provides for the exclusion from
Nebraska taxable income of any non-Nebraska income from an S-corporation or LLC. Therefore,
any associated preference item derived from the S-corporation or LLC included in the alternative
minimum tax calculations should be excluded to the same extent in the Nebraska computation.
The specific line entries and the required adjustments in recomputing the minimum tax for the
2000 Nebraska Individual Income Tax Return, Form 1040N, are provided below. Recalculate all
total or computational lines to reflect adjustments made pursuant to this ruling. All other
entries must be the same as for the federal minimum tax computation.
2000 Federal Form 6251:
Line 1. If you itemized deductions, go to line 2, Form 6251. Otherwise, enter any standard
deduction claimed on Line 6, Nebraska Form 1040N, and skip to Line 6, Form 6251.
Line 3. Enter line 9 from Federal Schedule A, minus line 8, Form 1040N.
Line 6. Enter zero.
Line 13. Enter only the tax-exempt interest from Nebraska private activity bonds issued after
August 7, 1986.
Line 16. Enter line 14, Form 1040N, Nebraska Tax Table Income.
Line 17. Enter any Nebraska net operating loss deduction included on line 48, Schedule I,
Form 1040N.
Line 18. Enter the limitation amount on the disallowed itemized deductions, if any, from line 11
of the Nebraska Itemized Deduction Worksheet on page 11 of the Form 1040N instructions.

Nebraska Department of Revenue, P.O. Box 94818, Lincoln, Nebraska 68509-4818

Revenue Ruling 22-00-1

December 29, 2000

Page 2 of 2

Line 20. Enter the alternative tax net operating loss deduction as adjusted for Nebraska
purposes.
Line 24. If Part IV of Form 6251 was used to make the line 24 entry, exclude any capital gains
in the calculation that were excluded on Line 46 of Nebraska Schedule I.
Line 25. Enter zero.
Line 27. Compute the regular federal income tax before credits on the Nebraska Tax Table
Income, line 14, Form 1040N. The same federal tax method used to complete line 40, Federal
Form 1040, is to be used. Enter the computed amount without subtracting any foreign tax
credit.
2000 Federal Form 1040A, Alternative Minimum Tax Worksheet:
Line 1. Add the amount from line 19, Form 1040A, the amount from line 12, Form 1040N
and any tax-exempt interest from Nebraska private activity bonds issued after August 7, 1986.
Subtract the amount entered on line 13, Form 1040N. Enter the result on line 1.
Line 20. If Lines 9 through 19 were used to make the line 20 entry, exclude any capital gains
in the calculation that were excluded on Line 46 of Nebraska Schedule I.
Line 21. Compute the regular federal income tax before credits on the Nebraska Tax Table
Income, line 14, Form 1040N. The same federal tax method used to complete line 26, Federal
Form 1040A, is to be used.
Line 28 of the recomputed Federal Form 6251 or line 22 of the recomputed Federal Form
1040A, Alternative Minimum Tax Worksheet, is to be entered on line 1 of the Nebraska
Minimum or Other Tax Worksheet found on page 8 of the instructions for Form 1040N. The
worksheet is to be completed to determine the amount to enter on line 16 of the Form 1040N,
or, for taxpayers filing Nebraska Schedule III, the amount to enter on line 64 of the Nebraska
Schedule III.
A copy of the recomputed Federal Form 6251 or Federal Form 1040A worksheet must be attached
to the Nebraska Individual Income Tax Return, Form 1040N, when filed.
The alternative minimum tax is to be recomputed for all taxable years beginning after December
31, 1978. Other rulings involving recomputation of Federal Form 6251 or the Federal Form 1040A,
Alternative Minimum Tax Worksheet, are shown for the preceding three years:
Tax Year
Revenue Ruling
Reference
1999

22-99-1

1998

22-98-1

1997

22-97-3

APPROVED:

Mary Jane Egr
State Tax Commissioner
December 29, 2000