Which Form or Schedule Is Used to Calculate AMT on the Return?

The Alternative Minimum Tax (AMT) serves as a parallel tax system to ensure individuals and corporations pay a minimum tax, regardless of deductions or credits they might otherwise use. Its complexity often confuses taxpayers about the necessary forms and schedules for accurate calculation.

Key AMT Requirements

The AMT targets high-income taxpayers by limiting certain deductions and credits. Taxpayers must calculate both regular and AMT liabilities, paying the higher amount. Adjustments include items like accelerated depreciation and state and local tax deductions, which modify taxable income to determine Alternative Minimum Taxable Income (AMTI).

For the 2024 tax year, AMT exemption amounts are $81,300 for single filers, $126,500 for married couples filing jointly, and $63,250 for married individuals filing separately. These exemptions phase out at $578,150 for single filers and $1,156,300 for joint filers. The AMT tax rates are 26% on the first $220,700 of AMTI and 28% on amounts above that threshold. These figures adjust annually for inflation.

Form Used to Calculate AMT for Individuals

Individuals use IRS Form 6251, “Alternative Minimum Tax—Individuals,” to determine AMT liability. This form guides taxpayers through recalculating taxable income under AMT rules by adding back deductions and exclusions not allowed under AMT, such as the standard deduction and certain itemized deductions. It also calculates the AMT exemption amount based on filing status, subject to phase-out at higher incomes.

Form Used to Calculate AMT for Corporations

Corporations use IRS Form 4626, “Alternative Minimum Tax—Corporations,” for AMT calculations. This form addresses corporate-specific adjustments for AMT preferences like depreciation methods and tax-exempt interest income. Corporations must also account for the Adjusted Current Earnings (ACE) adjustment, which modifies taxable income by including items like non-deductible fines. The AMT net operating loss deduction is limited to 90% of AMTI, and corporations with foreign operations must address foreign tax credits under AMT rules.

Schedules for Estates and Trusts

Estates and trusts calculate AMT obligations using Schedule I (Form 1041), “Alternative Minimum Tax—Estates and Trusts.” This schedule reflects the unique financial structures of estates and trusts, requiring adjustments for tax-exempt interest income and AMT-specific depreciation methods.

Filing Steps Once AMT Applies

When AMT applies, taxpayers must follow specific reporting steps. For individuals, Form 6251 determines AMT liability, which is then transferred to Form 1040, Schedule 2, Line 1. Supporting documentation, such as AMT adjustment records, should be retained for potential IRS review. Corporations calculate AMT using Form 4626 and integrate the liability into their overall tax calculation on Form 1120. AMT credits, determined on Form 8827, can offset future tax liabilities and should be carefully tracked for maximum benefit.