If you paid Alternative Minimum Tax (AMT) in a prior year, you may be eligible for the Credit for Prior Year Minimum Tax. This credit is calculated on IRS Form 8801 and may help reduce your tax bill if you have an available credit carryforward.
What is Form 8801?
Form 8801, Credit for Prior Year Minimum Tax, is used by individuals, estates, and trusts to:
- Figure the minimum tax credit from a prior year
- Claim any allowable credit on the current year's return
- Calculate any remaining credit carryforward to a future tax year
In short, if you paid AMT in an earlier year and didn't use all of the available credit, Form 8801 helps determine whether you can claim it now.
Who should file Form 8801?
According to the IRS, you should file Form 8801 if any of the following apply in a prior tax year:
- You had an Alternative Minimum Tax (AMT) liability and AMT adjustments or preferences other than exclusion items.
- You had a minimum tax credit carryforward from the previous year (shown on the prior year's Form 8801).
- You have an unallowed qualified electric vehicle credit.
If you're unsure whether you have a credit carryforward, check your prior year's Form 8801 for any unused credit amount.
How do I enter Form 8801 in the software?
To claim the Credit for Prior Year Minimum Tax, follow these steps:
- Go to Federal.
- Select Deductions (Select my forms).
- Choose Credits.
- Select Credit for Prior Year Minimum Tax.
- Enter the information from your Form 8801 or prior-year tax records.