How is the federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2013 individual income tax return?

Plain-English summary

This is the credit-side companion to Nebraska's 2013 AMT ruling (22-13-2). If you paid AMT in an earlier year, federal law gives you a credit for prior year minimum tax to recover some of it later; this ruling tells 2013 individual filers how to compute the Nebraska version of that credit.

The mechanics: you recompute the federal Form 8801 (Credit for Prior Year Minimum Tax) using the adjustments required by Neb. Rev. Stat. § 77-2715(2), pulling in your 2012 Federal Form 6251 and Form 8801 as already recomputed for Nebraska under Revenue Rulings 22-12-1 and 22-12-2. The ruling gives the specific line entries (in the original text below). Two rules stand out:

• If you have a 2013 AMT liability, you get no prior-year minimum tax credit for 2013.
• After the recomputation, you multiply line 25 of the recomputed 2013 Form 8801 by 29.6% (.2960) to get the Nebraska credit.

Where it goes: full-year residents enter the result on Form 1040N line 20b. Part-year residents and nonresidents write "AMT Credit" on Nebraska Schedule III line 82d and include the result on line 82e. The Nebraska Minimum Tax Credit is nonrefundable, and you must attach the recomputed Form 8801 to your Form 1040N.

Sunset context. The Nebraska Minimum Tax Credit was eliminated by LB 308 (2013) beginning with tax year 2014, so this recomputation applies to the 2013 return and earlier open years, not to current filings.

What this means for you

2013 individual filers claiming a prior-year minimum tax credit

Recompute Form 8801 under § 77-2715(2) using your Nebraska-recomputed 2012 forms, apply the 29.6% factor to line 25, and place the result on line 20b (residents) or Schedule III lines 82d/82e (part-year/nonresidents). Remember: no credit if you owe 2013 AMT, the credit is nonrefundable, and you must attach the recomputed Form 8801.

Current filers

Not applicable -- the Nebraska Minimum Tax Credit ended after tax year 2013 (LB 308, 2013).

Common questions

Q: Can I claim the prior-year minimum tax credit if I owe AMT in 2013?
A: No. If you have a 2013 tax year alternative minimum tax liability, a credit for prior year alternative minimum tax is not allowed.

Q: What factor converts the federal number to the Nebraska credit?
A: Multiply line 25 of the recomputed 2013 Federal Form 8801 by 29.6% (.2960).

Q: Is the Nebraska Minimum Tax Credit refundable?
A: No, it is nonrefundable. You must also attach the recomputed Form 8801 to your Form 1040N.

Q: Does this still apply?
A: Only for tax year 2013 and earlier open years. The Nebraska Minimum Tax Credit was eliminated by LB 308 (2013) beginning with tax year 2014.

Citations and references

• Neb. Rev. Stat. § 77-2715(2) -- the adjustments used to recompute the federal credit for prior year minimum tax for Nebraska purposes.
• LB 308 (2013) -- eliminated the Nebraska Minimum Tax Credit beginning with tax year 2014.
• Related computations: 22-13-2 (2013 AMT), and the 2012 Nebraska recomputations under 22-12-1 and 22-12-2.

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/rr221303_ind_prior_yr.pdf

Original ruling text

Revenue Ruling 22-13-3
Individual Income Tax
February 6, 2014

Computation of 2013 Credit for Prior Year Minimum Tax to
Determine Nebraska Minimum Tax Credit
for the 2013 Nebraska Return
Issue
How should the credit for prior year minimum tax computed for a taxpayer’s 2013 U.S. Individual
Income Tax Return, Federal Form 1040, be recalculated to compute the Nebraska tax credit?

Conclusion
The federal credit for prior year minimum tax must be recomputed using the adjustments required
by Neb. Rev. Stat. § 77-2715(2). This allows for the computation of 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
The specific line entries and the required adjustments in recomputing the credit for prior year
minimum tax for the 2013 Nebraska Individual Income Tax Return, Form 1040N, are provided
below. Recalculate all total or computational lines to reflect adjustments made pursuant to
this ruling.
If you have a 2013 tax year alternative minimum tax liability, a credit for prior year alternative
minimum tax is not allowed.
Use the amounts from the 2012 Federal Form 6251 (Alternative Minimum Tax - Individuals)
recomputed pursuant to Revenue Ruling 22-12-1 on all lines referencing the 2012
Federal Form 6251.
2013 Federal Form 8801 (Credit for Prior Year Minimum Tax - Individuals, Estates,
and Trusts):
Part I —
•

Line 3. Enter the minimum tax credit net operating loss deduction as adjusted for
Nebraska purposes.

•

Line 11. If Part III of Form 8801 was used to make the line 11 entry, exclude any capital
gains in the calculation that were entered on line 59 of Schedule I of the 2013 Nebraska
Form 1040N.

•

Line 12. Enter -0-.

Follow federal instructions to recompute the net minimum tax on exclusion items through line 15
of the 2013 Federal Form 8801.
Nebraska Department of Revenue, PO Box 94818, Lincoln, Nebraska 68509-4818

Revenue Ruling 22-13-3

February 6, 2014

Page 2 of 2

Part II —
•

Line 19. Enter the line 28 amount from the 2012 Federal Form 8801 recomputed pursuant
to Revenue Ruling 22-12-2.

•

Line 20. Enter -0-.

•

Line 22. Enter the recomputed 2013 regular federal income tax before credits, which was
entered on line 34 of the recomputed Federal Form 6251.

•

Line 23. Enter the line 33 amount of the 2013 Federal Form 6251 recomputed pursuant to
Revenue Ruling 22-13-2.

Multiply the amount on line 25 of the recomputed 2013 Federal Form 8801 by 29.6% (.2960).
Enter this result on the Nebraska Individual Income Tax Return, Form 1040N, as follows:
(a) Full-year residents must enter the result on line 20b.
(b) Partial-year residents and nonresidents must write in the phrase “AMT Credit” on line 82d,
Nebraska Schedule III, and include the result on line 82e, Nebraska Schedule III.
The Nebraska Minimum Tax Credit is a nonrefundable credit.
The recomputed Federal Form 8801 must be attached to the 2013 Nebraska Individual Income Tax
Return, Form 1040N, when filed.
The Nebraska Minimum Tax Credit is eliminated by enactment of LB 308 (2013) beginning for
tax year 2014.

APPROVED:

Kim Conroy
Tax Commissioner
February 6, 2014