NE 22-11-1 Individual Income Tax 2012-01-17

How is the 2011 federal alternative minimum tax recomputed to determine the Nebraska minimum tax on a 2011 individual income tax return?

Short answer: Recompute the federal AMT using Nebraska's adjustments. Revenue Ruling 22-11-1 tells 2011 individual filers to recalculate the alternative minimum tax (AMT) from their federal return (Form 6251, or the Form 1040A AMT Worksheet) using the adjustments required by Neb. Rev. Stat. § 77-2715, so that items treated differently for Nebraska -- such as excluding interest/dividends from U.S. obligations and non-Nebraska S corporation/LLC income (and related preference items), and including interest from non-Nebraska state or local obligations (§ 77-2716) -- flow through to the Nebraska minimum tax. The ruling gives line-by-line adjustments to the recomputed federal form; the recomputed Form 6251 line 35 (or Form 1040A worksheet line 22) goes in the appropriate area on line 16 of Form 1040N (line 74 of Nebraska Schedule III for part-year residents and nonresidents), and a copy of the recomputed federal form must be attached to the return.

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This page answers the general question as of 2012. Ezel answers yours, under current Nebraska tax law, with citations.

Disclaimer: This is an official Revenue Ruling of the Nebraska Department of Revenue, a guidance document stating the Department's interpretation of how Nebraska tax law applies. Each Nebraska guidance document carries the notice that it 'is advisory in nature but is binding on the Nebraska Department of Revenue until amended.' Unlike a private letter ruling, a Revenue Ruling is a general statement of Department policy rather than advice to a single taxpayer, but it can be amended, superseded, or made obsolete by a later ruling or a change in statute or regulation, many rulings in this series have been rescinded or superseded, so confirm it is still in effect before relying on it. Nebraska's local option sales and use taxes are administered by the Department, not self-collected by home-rule cities. This summary is informational only and is not legal or tax advice. Consult a licensed Nebraska tax professional about your situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.

View original ruling (PDF)

Plain-English summary

This is a mechanical, year-specific worksheet ruling for 2011 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 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 2011 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). The recomputed Form 6251 line 35 (or Form 1040A worksheet line 22) goes in the appropriate area on line 16 of Form 1040N, or line 74 of Nebraska Schedule III for part-year residents and nonresidents. You must attach a copy of the recomputed federal form to your Form 1040N. Recalculate every total or computational line; all other entries stay the same as the federal computation.

Context. The AMT is recomputed for all taxable years beginning after December 31, 1978. The ruling lists the equivalent prior-year rulings: 22-10-4 (2010), 22-09-1 (2009), and 22-08-1 (2008). Note that 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 2011 return and other still-open years, not to current filings.

What this means for you

2011 individual filers (and amended-return preparers for open years)

If you had a federal AMT for 2011, you had to recompute it for Nebraska using the § 77-2715/§ 77-2716 adjustments 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 2011 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) before carrying it to Form 1040N.

Q: What are the main Nebraska adjustments?
A: Exclude interest/dividends from U.S. obligations and non-Nebraska S corp/LLC income (and related preference items); include interest from non-Nebraska state or local obligations (Neb. Rev. Stat. § 77-2716).

Q: Where does the recomputed amount go, and do I attach anything?
A: In the appropriate area on line 16 of Form 1040N (or line 74 of Nebraska Schedule III for part-year residents/nonresidents). Attach a copy of the recomputed Federal Form 6251 or the Form 1040A AMT Worksheet.

Q: Does this still apply?
A: Only for tax year 2011 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).
Individual Income Tax Reg-22-002.05A -- referenced for the exclusion of U.S.-obligation interest/dividends.
Prior-year companions listed in the ruling: 22-10-4 (2010), 22-09-1 (2009), 22-08-1 (2008).

Source

Original ruling text

Revenue Ruling 22-11-1
Individual Income Tax

January 17, 2012
COMPUTATION OF 2011 ALTERNATIVE MINIMUM TAX TO DETERMINE
NEBRASKA MINIMUM TAX FOR THE 2011 NEBRASKA RETURN
ISSUE.
How should the alternative minimum (AMT) tax computed for a taxpayer’s 2011 U.S. Individual
Income Tax Return, Federal Form 1040 or 1040A, be recalculated to compute the Nebraska AMT?
CONCLUSION.
The federal AMT must be recomputed using the adjustments required by Neb. Rev. Stat. § 77-2715.
This will facilitate the computation for 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 AMT.
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. Neb. Rev. Stat. § 77-2716 also provides for the exclusion from Nebraska taxable income
of any non-Nebraska income from an S corporation or limited liability company (LLC). Therefore, any
associated preference item derived from the S corporation or LLC included in the AMT calculations
should be excluded to the same extent in the Nebraska computation.
The specific line entries and the required adjustments in recalculating the minimum tax for the
2011 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.
2011 Federal Form 6251 (Alternative Minimum Tax - Individuals):
•

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 the Federal Form 6251, line 3 amount, less the amount from line 8,
Form 1040N.

•

Line 7. Enter -0-.

•

Line 10. Enter any Nebraska net operating loss deduction included on line 58, Schedule I,
Form 1040N.

•

Line 11. Enter the alternative tax net operating loss deduction as adjusted for Nebraska purposes.

•

Line 12. Enter only the tax-exempt interest from Nebraska private activity bonds issued after
August 7, 1986.

Nebraska Department of Revenue, PO Box 94818, Lincoln, Nebraska 68509-4818

Revenue Ruling 22-11-1

January 17, 2012

Page 2 of 2

•

Line 31. If Part III of Form 6251 was used to make the line 31 entry, exclude any capital gains
in the calculation that were excluded on line 55 of Nebraska Schedule I.

•

Line 32. Enter -0-.

•

Line 34. 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, must be used. Enter the computed amount without subtracting any foreign tax credit.

2011 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 20. If lines 9 through 19 were used to make the line 20 entry, exclude any capital gains in
the calculation that were excluded on line 55 of Nebraska Schedule I.

•

Line 21. 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, must be used.

•

Line 35 of the recomputed Federal Form 6251 or line 22 of the recomputed Federal Form 1040A,
Alternative Minimum Tax Worksheet, is to be entered in the appropriate area on line 16 of
Form 1040N. For taxpayers filing Nebraska Schedule III, enter this amount on line 74 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 AMT is to be recomputed for all taxable years beginning after December 31, 1978. Other revenue
rulings involving recomputation of Federal Form 6251, or the Federal Form 1040A, Alternative
Minimum Tax Worksheet, are shown below for the preceding three years:
2010 22-10-4
2009 22-09-1
2008 22-08-1
APPROVED:

Douglas A. Ewald
Tax Commissioner
January 17, 2012

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