How is the 2008 federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2008 individual income tax return?

Plain-English summary

This is a mechanical, year-specific worksheet ruling for 2008 individual returns. It doesn't decide a policy question -- it tells you how to translate your federal alternative minimum tax (AMT) into the Nebraska minimum tax.

The problem it solves: Nebraska starts from federal figures but treats some items differently, so you can't just copy your federal AMT onto the Nebraska return -- you have to recompute the federal AMT using Nebraska's adjustments (Neb. Rev. Stat. § 77-2715) and then carry the recomputed result through the Nebraska worksheet to Form 1040N. The adjustments under § 77-2716 include:

• Excluding interest or dividends from U.S. obligations (which Nebraska doesn't tax).
• Including interest or dividends from non-Nebraska state or local obligations.
• Excluding non-Nebraska income from an S corporation or LLC -- and excluding any related AMT preference item to the same extent.

How it works in practice: starting from your 2008 Federal Form 6251 (AMT - Individuals) or the Form 1040A AMT Worksheet, you redo specific lines using amounts from your Nebraska Form 1040N (the ruling lists the exact line-by-line changes -- see the original text below). You then enter the recomputed Form 6251 line 36 (or Form 1040A worksheet line 24) on line 1 of the Nebraska Minimum or Other Tax Worksheet (found on page 14 of the Form 1040N instructions), and complete that worksheet to determine the amount to enter on line 16 of Form 1040N, or line 75 of Nebraska Schedule III for part-year residents and nonresidents. You must attach a copy of the recomputed federal form to your Form 1040N.

Context. The AMT is recomputed for all taxable years beginning after December 31, 1978. The ruling lists the equivalent prior-year rulings: 22-07-1 (2007), 22-06-1 (2006), and 22-05-1 (2005). Nebraska later eliminated its individual Alternative Minimum Tax, effective for tax years beginning on or after January 1, 2014 -- so this recomputation is historical, applying to the 2008 return and other still-open years, not to current filings.

What this means for you

2008 individual filers (and amended-return preparers for open years)

If you had a federal AMT for 2008, you had to recompute it for Nebraska using the § 77-2715/§ 77-2716 adjustments, run the recomputed amount through the Nebraska Minimum or Other Tax Worksheet, and attach the recomputed federal form to your Form 1040N. Follow the specific line entries in the original text; recompute every total/computational line but leave all other entries the same as the federal computation.

Current filers

You don't need this. Nebraska's individual AMT ended for tax years beginning on or after January 1, 2014. This ruling matters only for 2008 or other still-open earlier tax years.

Common questions

Q: Can I use my federal AMT number as-is on the Nebraska return?
A: No. You must recompute the federal AMT using Nebraska's adjustments (Neb. Rev. Stat. § 77-2715), then run it through the Nebraska Minimum or Other Tax Worksheet before it reaches Form 1040N.

Q: Where does the recomputed amount go?
A: Enter recomputed Form 6251 line 36 (or Form 1040A worksheet line 24) on line 1 of the Nebraska Minimum or Other Tax Worksheet; the worksheet result goes on line 16 of Form 1040N (line 75 of Nebraska Schedule III for part-year residents/nonresidents).

Q: Do I attach anything?
A: Yes. Attach a copy of the recomputed Federal Form 6251 or the Form 1040A AMT Worksheet to your Form 1040N.

Q: Does this still apply?
A: Only for tax year 2008 and other still-open earlier years. Nebraska eliminated its individual AMT for tax years beginning on or after January 1, 2014.

Citations and references

• Neb. Rev. Stat. § 77-2715 -- the adjustments used to recompute the federal AMT for Nebraska minimum tax purposes.
• Neb. Rev. Stat. § 77-2716 -- Nebraska adjustments (exclude U.S.-obligation interest/dividends and non-Nebraska S corp/LLC income and related preference items; include non-Nebraska state/local obligation interest).
• Prior-year companions listed in the ruling: 22-07-1 (2007), 22-06-1 (2006), 22-05-1 (2005).

Source

• Landing page: https://revenue.nebraska.gov/about/legal-information/revenue-rulings-issued-tax-commissioner
• Original PDF: https://revenue.nebraska.gov/sites/revenue.nebraska.gov/files/doc/legal/rulings/rr220801.pdf

Original ruling text

Revenue Ruling 22-08-1
Individual Income Tax

January 22, 2009
COMPUTATION OF 2008 ALTERNATIVE MINIMUM TAX TO DETERMINE
NEBRASKA MINIMUM TAX FOR THE 2008 NEBRASKA RETURN
Issue:
How is the alternative minimum tax computed for a taxpayer’s 2008 U.S. Individual Income
Tax Return, Federal Form 1040 or 1040A, to be recalculated in order to compute the Nebraska
alternative minimum tax?
Conclusion:
Neb. Rev. Stat. § 77-2715 provides that the federal alternative minimum tax is to be recomputed
by substituting Nebraska taxable income for federal taxable income and adjusting the Nebraska
alternative minimum tax calculations for any items 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.
Analysis:
Among the adjustments provided by Neb. Rev. Stat. § 77-2716 are the exclusion from federal
adjusted gross income of interest or dividends from U.S. obligations as set forth in Individual
Income Tax Reg-22-002.05A and the inclusion of interest or dividends from non-Nebraska source
state or local obligations. Section 77-2716 also provides for the exclusion from Nebraska taxable
income of any non-Nebraska income from an S corporation or LLC. Therefore, any associated
preference item derived from the S corporation or LLC included in the alternative minimum tax
calculations should be excluded to the same extent in the Nebraska computation.
The specific line entries and the required adjustments in recomputing the 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. All other
entries must be the same as for the federal minimum tax computation.
2008 Federal Form 6251:
Line 1. If you itemized deductions, enter the amount from line 14, Nebraska Form 1040N and go
to line 2, Form 6251.
Otherwise, enter line 5, plus line 12 minus line 13 from Nebraska Form 1040N, and skip to line 8,
Form 6251.
Line 3. Enter line 9 from Federal Schedule A, minus line 8, Form 1040N.
Line 8. Enter -0-.
Line 11. Enter any Nebraska net operating loss deduction included on line 59, Schedule I,
Form 1040N.
Line 12. Enter only the tax-exempt interest from Nebraska private activity bonds issued after
August 7, 1986.

Nebraska Department of Revenue, P.O. Box 94818, Lincoln, Nebraska 68509-4818

Revenue Ruling 22-08-1

January 22, 2009

Page 2 of 2

Line 28. Enter the alternative tax net operating loss deduction as adjusted for Nebraska purposes.
Line 32. If Part III of Form 6251 was used to make the line 32 entry, exclude any capital gains in
the calculation that were excluded on line 54 of Nebraska Schedule I.
Line 33. Enter -0-.
Line 35. Compute the regular federal income tax before credits on the Nebraska Tax Table Income,
line 14, Form 1040N. The same federal tax method used to complete line 44, Federal Form
1040, is to be used. Enter the computed amount without subtracting any foreign tax credit.
2008 Federal Form 1040A, Alternative Minimum Tax Worksheet:
Line 1. Add the amount from line 22, Form 1040A, and the amount from line 12, Form 1040N.
Subtract the amount entered on line 13, Form 1040N. Enter the result on line 1.
Line 22. If lines 11 through 21 were used to make the line 22 entry, exclude any capital gains in
the calculation that were excluded on line 54 of Nebraska Schedule I.
Line 23. Compute the regular federal income tax before credits on the Nebraska Tax Table Income,
line 14, Form 1040N. The same federal tax method used to complete line 28, Federal Form
1040A, is to be used.
Line 36 of the recomputed Federal Form 6251 or line 24 of the recomputed Federal Form 1040A,
Alternative Minimum Tax Worksheet, is to be entered on line 1 of the Nebraska Minimum or
Other Tax Worksheet found on page 14 of the instructions for Form 1040N. The worksheet is to be
completed to determine the amount to enter on line 16 of the Form 1040N, or, for taxpayers filing
Nebraska Schedule III, the amount to enter on line 75 of the Nebraska Schedule III.
A copy of the recomputed Federal Form 6251, or Federal Form 1040A, Alternative Minimum
Tax Worksheet, must be attached to the Nebraska Individual Income Tax Return, Form 1040N,
when filed.
The alternative minimum tax is to be recomputed for all taxable years beginning after
December 31, 1978. Other rulings involving recomputation of Federal Form 6251, or the Federal
Form 1040A, Alternative Minimum Tax Worksheet, are shown for the preceding three years:
2007 22-07-1
2006 22-06-1
2005 22-05-1
APPROVED:

Douglas A. Ewald
Tax Commissioner
January 22, 2009