AMT Credit

tax

Also known as: Minimum Tax Credit, AMT Credit

Updated · Written and reviewed by Konstantin Iakovlev

Detailed explanation

When you pay AMT in one year (often from ISO exercise), the excess over regular tax becomes a future credit. You can claim it on Form 8801 in subsequent years when your regular tax exceeds AMT. The credit is limited each year to the difference between regular tax and AMT — so you may carry it forward many years before using fully. AMT credit doesn't expire. Particularly valuable for tech employees who exercised large ISO grants — the AMT paid in the exercise year often gets recovered over 5-10 subsequent years as ISO shares are sold.

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