J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

23.3 Tax Credits Allowed Against AMT

The only tax credit allowed in computing tentative alternative minimum tax liability on Form 6251 is a revised version of the foreign tax credit allowed for regular tax purposes. The allowable credit is generally based on foreign source AMT income. The AMT foreign tax credit reduces the tentative AMT figured on Form 6251 before comparing it to the regular tax liability (actual AMT is the excess if any, of tentative AMT over the regular tax). If the AMT foreign tax credit exceeds the limits detailed in the Form 6251 instructions, the unused amount generally may be carried back or forward; follow the Form 6251 instructions.

Extension of rule allowing nonrefundable personal credits expected. As noted at 23.1, Congress is expected to enact legislation that provides a “patch” to the AMT exemptions for 2012, but had not yet done so when this book went to press. In prior years, the patch legislation has also included an extension of the rule that allows all nonrefundable personal credits to offset AMT as well as regular tax liability on Form 1040, and it is certain that a 2012 patch would also include the credit extension. Without the extension, certain tax credits such as the dependent care credit and the Lifetime Learning credit would be allowed only to the extent that regular tax liability exceeded tentative AMT liability. See the e-Supplement at jklasser.com for a legislation update.