COMPUTATION OF 2008 CREDIT FOR PRIOR YEAR MINIMUM TAX TO
DETERMINE NEBRASKA MINIMUM TAX CREDIT
FOR THE 2008 NEBRASKA RETURN
How is the credit for prior year minimum tax computed for a taxpayer’s 2008 U.S. Individual Income Tax Return, Federal Form 1040, to be recalculated in order to compute the Nebraska tax credit?
Neb. Rev. Stat. § 77-2715(2) directs that the federal credit for prior year minimum tax be recomputed using the adjustments required by the Nebraska Revenue Act of 1967, as amended. 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.
The specific line entries and the required adjustments in recomputing the credit for prior year minimum tax for the 2008 Nebraska Individual Income Tax Return, Form 1040N, are provided below. Recalculate all total or computational lines to reflect adjustments made pursuant to this ruling.
Use the amounts from the 2007 Federal Form 6251 recomputed pursuant to Revenue Ruling 22-07-1 on all lines referencing 2007 Federal Form 6251.
2008 Federal Form 8801:
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 54 of Schedule I of the 2008 Nebraska Form 1040N.
Line 12. Enter -0-.
Follow federal instructions to recompute the net minimum tax on exclusion items through line 15 of the 2008 Federal Form 8801.
Part II —
Line 19. Enter the line 28 amount from the 2007 Federal Form 8801 recomputed pursuant to Revenue Ruling 22-07-2.
Line 20. Enter -0-.
Line 25. Enter the recomputed 2008 regular federal income tax before credits that was entered on line 35 of the recomputed Federal Form 6251.
Line 26. Enter the line 34 amount of the 2008 Federal Form 6251 recomputed pursuant to Revenue Ruling 22-08-1.
Multiply the amount on line 28 of the recomputed 2008 Federal Form 8801 by 29.6% (.2960). This result is to be entered on the Nebraska Individual Income Tax Return, Form 1040N, as follows:
(a) Full-year residents are to check the AMT Credit Box and enter the result on line 20;
(b) Partial-year residents and nonresidents are to enter the result on line 71, Nebraska Schedule III, and write in the phrase, “AMT Credit”.
The Nebraska Minimum Tax Credit is a nonrefundable credit.
The recomputed Federal Form 8801 must be attached to the 2008 Nebraska Individual Income Tax Return, Form 1040N, when filed.
Douglas A. Ewald
January 22, 2009