How is the federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2013 fiduciary (estate or trust) return?

Plain-English summary

This is the estate-and-trust, credit-side ruling in Nebraska's 2013 minimum-tax set. It's the fiduciary counterpart to 22-13-3 (individuals) and the credit companion to 23-13-1 (fiduciary AMT). It tells fiduciaries how to compute the Nebraska credit for prior year minimum tax on a 2013 Form 1041N.

The mechanics: you recompute the federal Form 8801 (Credit for Prior Year Minimum Tax) using the adjustments required by Neb. Rev. Stat. § 77-2717. You lean on companion Revenue Ruling 23-13-1 for the underlying Nebraska AMT adjustments, and on your 2012 Federal Form 1041 Schedule I and Form 8801 as already recomputed for Nebraska under Revenue Rulings 23-12-1 and 23-12-2. The ruling gives the specific line entries (see the original text below). Two rules stand out:

• If the estate or trust has a 2013 AMT liability, no prior-year minimum tax credit is allowed.
• After recomputation, multiply line 25 of the recomputed 2013 Form 8801 by 29.6% (.2960) to get the Nebraska credit.

Where it goes: resident estates and trusts enter the result on line 13 of Form 1041N and write "AMT Credit." Nonresident estates and trusts enter it on line 30 of Nebraska Schedule I with "AMT Credit," as a negative number, subtract it from line 29, and carry the difference to line 31. The credit is nonrefundable, and the recomputed Form 8801 must be attached to the return.

Sunset context. The Nebraska Minimum Tax Credit was eliminated by LB 308 (2013) beginning with tax year 2014, so this applies to the 2013 return and earlier open years only.

What this means for you

Fiduciaries claiming the credit on a 2013 (or amended open-year) return

Recompute Form 8801 under § 77-2717 using ruling 23-13-1 and your Nebraska-recomputed 2012 forms, apply the 29.6% factor to line 25, and enter the result per your residency (line 13 for residents; Schedule I line 30 as a negative for nonresidents). The credit is nonrefundable, there's no credit if you owe 2013 AMT, and you must attach the recomputed Form 8801.

Current fiduciary filers

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

Common questions

Q: Can the estate or trust claim this credit if it owes 2013 AMT?
A: No. If there is a 2013 tax year alternative minimum tax liability, a credit for prior year alternative minimum tax is not allowed.

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

Q: Where do residents vs. nonresidents enter the credit?
A: Resident estates/trusts on line 13 of Form 1041N (write "AMT Credit"); nonresident estates/trusts on line 30 of Nebraska Schedule I as a negative, subtracted from line 29 with the difference on line 31.

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. § 77-2717 -- the adjustments used to recompute the federal credit for prior year minimum tax for Nebraska fiduciary purposes.
• LB 308 (2013) -- eliminated the Nebraska Minimum Tax Credit beginning with tax year 2014.
• Related computations: 23-13-1 (2013 fiduciary AMT), and the 2012 Nebraska recomputations under 23-12-1 and 23-12-2.

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/rr231302_fid_prior_yr.pdf

Original ruling text

Revenue Ruling 23-13-2
Fiduciary Income Tax
February 11, 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 on Credit for Prior Year Minimum
Tax-Individuals, Estates, and Trusts, Federal Form 8801, for a taxpayer’s 2013 U.S. Fiduciary
Income Tax Return, Federal Form 1041, 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. § 77-2717. This allows for the computation of items which are reflected differently
in the determination of the federal credit for prior year minimum tax. This applies to any schedules
or other forms, the results of which are used in calculating the federal credit.

Analysis
Nebraska Revenue Ruling 23-13-1 provides the adjustments for alternative minimum tax (AMT)
computations for Nebraska determinations. This ruling must be used for purposes of calculating
the Nebraska credit for prior year minimum tax.
If you have a 2013 tax year alternative minimum tax liability, a credit for prior year alternative
minimum tax is not allowed.
The specific line entries and the required adjustments in recomputing the credit for prior year
minimum tax for the 2013 Nebraska Fiduciary Income Tax Return, Form 1041N, are provided
below. Recalculate all total or computational lines to reflect adjustments made pursuant to
this ruling.
In completing the 2013 Federal Form 8801, use the amounts from the 2012 Federal Form 1041,
Schedule I, and Federal Form 8801 recomputed for Nebraska pursuant to Revenue Rulings 23‑12‑1
and 23-12-2.
2013 Federal Form 8801 (Credit for Prior Year Minimum Tax - Individuals, Estates,
and Trusts):
Part I –
•

Line 4. Use the federal instructions for calculating the amount to enter on line 4, and follow
Revenue Ruling 23-12-1 when completing any line 8 (tax-exempt interest or dividends)
or line 24 (alternative tax net operating loss) entries on the 2013 Federal Form 1041,
Schedule I.

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

Revenue Ruling 23-13-2

February 11, 2014

Page 2 of 2

•

Line 11. If Part III of Federal Form 8801 was used to make the line 11 entry, exclude any
capital gains in the calculation that were deducted on line 5 of the 2012 Nebraska Form
1041N as a special capital gains exclusion.

•

Line 12. Enter -0-.

Follow federal instructions to recompute the net minimum tax on exclusion items through line 15
of the recomputed 2013 Federal Form 8801.
Part II –
•

Line 19. Enter the line 28 amount from the 2012 Federal Form 8801 recomputed pursuant
to Revenue Ruling 23-12-2.

•

Line 20. Enter -0-.

•

Line 22. Enter line 55 from the recomputed 2013 Federal Form 1041, Schedule I.

•

Line 23. Enter the line 54 amount from the 2013 Federal Form 1041, Schedule I, as
recomputed pursuant to Revenue Ruling 23-13-1.

Multiply line 25 of the recomputed 2013 Federal Form 8801 by 29.6 percent (.2960). Enter this
result on the Nebraska Fiduciary Income Tax Return, Form 1041N, as follows:
(a) Resident estates and trusts must enter the result on line 13 and write in the phrase,
“AMT Credit.”
(b) Nonresident estates and trusts must enter the result on line 30, Nebraska Schedule I, and
write in the phrase, “AMT Credit.” Enter as a negative number, subtract from line 29, and
enter difference on line 31.
The Nebraska Minimum Tax Credit is a nonrefundable credit.
The recomputed Federal Form 8801 must be attached to the 2013 Nebraska Fiduciary Income Tax
Return, Form 1041N, 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 11, 2014