NE 22-10-4 Individual Income Tax 2011-04-19

How is the 2010 federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2010 individual income tax return?

Short answer: Recompute the federal AMT using Nebraska's adjustments. Revenue Ruling 22-10-4 -- a re-issued ruling that supersedes 22-10-2 -- tells 2010 individual filers to recalculate the alternative minimum tax (AMT) from their federal return (Form 6251, or the Form 1040A AMT Worksheet) using the adjustments required by Neb. Rev. Stat. § 77-2715, so that items treated differently for Nebraska -- such as excluding interest/dividends from U.S. obligations and non-Nebraska S corporation/LLC income (and related preference items), and including interest from non-Nebraska state or local obligations (§ 77-2716) -- flow through to the Nebraska minimum tax. The ruling gives line-by-line adjustments; the recomputed Form 6251 line 35 (or Form 1040A worksheet line 22) goes in the appropriate area on line 16 of Form 1040N (line 75 of Nebraska Schedule III for part-year residents and nonresidents), and a copy of the recomputed federal form must be attached to the return.

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This page answers the general question as of 2011. Ezel answers yours, under current Nebraska tax law, with citations.

Disclaimer: This is an official Revenue Ruling of the Nebraska Department of Revenue, a guidance document stating the Department's interpretation of how Nebraska tax law applies. Each Nebraska guidance document carries the notice that it 'is advisory in nature but is binding on the Nebraska Department of Revenue until amended.' Unlike a private letter ruling, a Revenue Ruling is a general statement of Department policy rather than advice to a single taxpayer, but it can be amended, superseded, or made obsolete by a later ruling or a change in statute or regulation, many rulings in this series have been rescinded or superseded, so confirm it is still in effect before relying on it. Nebraska's local option sales and use taxes are administered by the Department, not self-collected by home-rule cities. This summary is informational only and is not legal or tax advice. Consult a licensed Nebraska tax professional about your situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

This is a mechanical, year-specific worksheet ruling for 2010 individual returns. It's a re-issued version that supersedes Revenue Ruling 22-10-2 (issued February 2, 2011). It doesn't decide a policy question -- it tells you how to translate your federal alternative minimum tax (AMT) into the Nebraska minimum tax.

The problem it solves: Nebraska starts from federal figures but treats some items differently, so you can't just copy your federal AMT onto the Nebraska return -- you have to recompute the federal AMT using Nebraska's adjustments (Neb. Rev. Stat. § 77-2715) and then carry the recomputed result to Form 1040N. The adjustments under § 77-2716 include:

Excluding interest or dividends from U.S. obligations (which Nebraska doesn't tax).
Including interest or dividends from non-Nebraska state or local obligations.
Excluding non-Nebraska income from an S corporation or LLC -- and excluding any related AMT preference item to the same extent.

How it works in practice: starting from your 2010 Federal Form 6251 (AMT - Individuals) or the Form 1040A AMT Worksheet, you redo specific lines using amounts from your Nebraska Form 1040N (the ruling lists the exact line-by-line changes -- see the original text below). The recomputed Form 6251 line 35 (or Form 1040A worksheet line 22) goes in the appropriate area on line 16 of Form 1040N, or line 75 of Nebraska Schedule III for part-year residents and nonresidents. You must attach a copy of the recomputed federal form to your Form 1040N.

Context. The AMT is recomputed for all taxable years beginning after December 31, 1978. The ruling lists the equivalent prior-year rulings: 22-09-1 (2009), 22-08-1 (2008), and 22-07-1 (2007). Nebraska later eliminated its individual Alternative Minimum Tax, effective for tax years beginning on or after January 1, 2014 -- so this recomputation is historical, applying to the 2010 return and other still-open years, not to current filings.

What this means for you

2010 individual filers (and amended-return preparers for open years)

If you had a federal AMT for 2010, you had to recompute it for Nebraska using the § 77-2715/§ 77-2716 adjustments and attach the recomputed federal form to your Form 1040N. Follow the specific line entries in the original text; recompute every total/computational line but leave all other entries the same as the federal computation. Because this ruling was re-issued, use it (not the superseded 22-10-2) for a 2010 return.

Current filers

You don't need this. Nebraska's individual AMT ended for tax years beginning on or after January 1, 2014. This ruling matters only for 2010 or other still-open earlier tax years.

Common questions

Q: Why is this ruling marked "re-issued"?
A: It supersedes Revenue Ruling 22-10-2 (issued February 2, 2011); use 22-10-4 for the 2010 individual AMT recomputation.

Q: Can I use my federal AMT number as-is on the Nebraska return?
A: No. You must recompute the federal AMT using Nebraska's adjustments (Neb. Rev. Stat. § 77-2715) before carrying it to Form 1040N.

Q: Where does the recomputed amount go, and do I attach anything?
A: In the appropriate area on line 16 of Form 1040N (or line 75 of Nebraska Schedule III for part-year residents/nonresidents). Attach a copy of the recomputed Federal Form 6251 or the Form 1040A AMT Worksheet.

Q: Does this still apply?
A: Only for tax year 2010 and other still-open earlier years. Nebraska eliminated its individual AMT for tax years beginning on or after January 1, 2014.

Citations and references

Neb. Rev. Stat. § 77-2715 -- the adjustments used to recompute the federal AMT for Nebraska minimum tax purposes.
Neb. Rev. Stat. § 77-2716 -- Nebraska adjustments (exclude U.S.-obligation interest/dividends and non-Nebraska S corp/LLC income and related preference items; include non-Nebraska state/local obligation interest).
Revenue Ruling 22-10-2 -- the earlier 2010 ruling this re-issued ruling supersedes.
Prior-year companions listed in the ruling: 22-09-1 (2009), 22-08-1 (2008), 22-07-1 (2007).

Source

Original ruling text

Revenue Ruling 22-10-4
Individual Income Tax

Supersedes Revenue Ruling 22-10-2 (issued February 2, 2011)

April 19, 2011

COMPUTATION OF 2010 ALTERNATIVE MINIMUM TAX TO DETERMINE
NEBRASKA MINIMUM TAX FOR THE 2010 NEBRASKA RETURN
Issue:
How is the alternative minimum tax computed for a taxpayer’s 2010 U.S. Individual Income Tax
Return, Federal Form 1040 or 1040A, to be recalculated in order to compute the Nebraska alternative
minimum tax?
Conclusion:
Neb. Rev. Stat. § 77-2715 provides that the federal alternative minimum tax is to 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.
Analysis:
Among the adjustments provided by Neb. Rev. Stat. § 77-2716 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 non-Nebraska source state or local
obligations. Neb. Rev. Stat. § 77-2716 also provides for the exclusion from Nebraska taxable income
of any non-Nebraska income from an S corporation or limited liability company (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 recalculating the minimum tax for the
2010 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.
2010 Federal Form 6251 (Alternative Minimum Tax - Individuals):
•

Line 1. If you itemized deductions, enter the amount from line 14, Nebraska Form 1040N, and
go to line 2, Form 6251. Otherwise, enter line 5, plus line 12, minus line 13 from Nebraska
Form 1040N, and skip to line 8, Form 6251.

•

Line 3. Enter the Federal Form 6251, line 3 amount, less the amount from line 8,
Form 1040N.

•

Line 7. Enter -0-.

•

Line 10. Enter any Nebraska net operating loss deduction included on line 59, Schedule I,
Form 1040N.

•

Line 11. Enter the alternative tax net operating loss deduction as adjusted for Nebraska
purposes.

Nebraska Department of Revenue, PO Box 94818, Lincoln, Nebraska 68509-4818

Revenue Ruling 22-10-4

April 19, 2011

Page 2 of 2

This ruling is being re-issued to correct an inaccurate line number reference.
The previous reference to line 32 was incorrect.

•

Line 12. Enter only the tax-exempt interest from Nebraska private activity bonds issued after
August 7, 1986.

•

Line 31. If Part III of Form 6251 was used to make the line 31 entry, exclude any capital gains
in the calculation that were excluded on line 54 of Nebraska Schedule I.

•

Line 32. Enter -0-.

•

Line 34. 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 44, Federal
Form 1040, is to be used. Enter the computed amount without subtracting any foreign tax
credit.

2010 Federal Form 1040A, Alternative Minimum Tax Worksheet:
•

Line 1. Add the amount from line 22, Form 1040A, and the amount from line 12, Form 1040N.
Subtract the amount entered on line 13, Form 1040N. Enter the result on line 1.

•

Line 24. If lines 13 through 23 were used to make the line 24 entry, exclude any capital gains
in the calculation that were excluded on line 54 of Nebraska Schedule I.

•

Line 25. 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 28, Federal
Form 1040A, is to be used.

•

Line 35 of the recomputed Federal Form 6251 or line 26 of the recomputed Federal Form
1040A, Alternative Minimum Tax Worksheet, is to be entered in the appropriate area on line
16 of Form 1040N. For taxpayers filing Nebraska Schedule III, enter this amount on line 75 of
the Nebraska Schedule III.

A copy of the recomputed Federal Form 6251, or Federal Form 1040A, Alternative Minimum
Tax 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 revenue rulings involving recomputation of Federal Form 6251, or the Federal Form 1040A,
Alternative Minimum Tax Worksheet, are shown below for the preceding three years:
2009 22-09-1
2008 22-08-1
2007 22-07-1
APPROVED:

Douglas A. Ewald
Tax Commissioner
April 19, 2011

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