How is the 2010 federal credit for prior year minimum tax recomputed to determine the Nebraska minimum tax credit on a 2010 estate or trust (fiduciary) return?

Plain-English summary

This is a mechanical, year-specific worksheet ruling for 2010 estate and trust (fiduciary) returns. It is the fiduciary counterpart to Revenue Ruling 22-10-3 (individuals), and the companion to Revenue Ruling 23-10-1 (which recomputes the 2010 fiduciary AMT): this one recomputes the credit for prior year minimum tax.

What the credit is: if an estate or trust paid AMT in an earlier year on "deferral" items, federal law lets it claim some of that back later as a minimum tax credit (federal Form 8801). Because Nebraska treats certain items differently, the federal credit can't be used as-is -- it has to be recomputed for Nebraska.

How it works in practice: using the adjustments required by Neb. Rev. Stat. § 77-2717, you redo specific lines of the 2010 Federal Form 8801 (the ruling lists the exact line-by-line changes -- see the original text below), drawing on the prior-year recomputations (Revenue Rulings 23-09-1 and related) and the 2010 fiduciary AMT recomputation from Revenue Ruling 23-10-1. Then you multiply the recomputed Form 8801 line 25 by 29.6% (.2960) and enter that result on Form 1041N:

• Resident estates and trusts: on line 12, writing in the phrase "AMT Credit."
• Nonresident estates and trusts: on line 29 of Nebraska Schedule I, entered as a negative number.

The Nebraska minimum tax credit is nonrefundable, and a copy of the recomputed Form 8801 must be attached to the return.

Context. This ruling is part of the annual AMT/minimum-tax-credit series. Nebraska later eliminated its Alternative Minimum Tax, effective for tax years beginning on or after January 1, 2014, so this recomputation is historical -- it applies to the 2010 return and other still-open years, not to current filings.

What this means for you

2010 estate/trust (fiduciary) filers claiming the prior-year minimum tax credit (and amended-return preparers for open years)

If the estate or trust claimed a federal credit for prior year minimum tax for 2010, you had to recompute it for Nebraska under § 77-2717, take 29.6% of the recomputed Form 8801 line 25, and report it on Form 1041N (line 12 for residents) or Nebraska Schedule I (line 29 for nonresidents). Attach the recomputed Form 8801. The credit is nonrefundable.

Current filers

You don't need this. Nebraska's AMT -- and this related credit -- ended for tax years beginning on or after January 1, 2014. This ruling matters only for 2010 or other still-open earlier tax years.

Common questions

Q: How is this different from the individual version (22-10-3)?
A: It applies to estates and trusts filing Form 1041N rather than individuals filing Form 1040N, and it uses the fiduciary adjustment statute, Neb. Rev. Stat. § 77-2717.

Q: What is the 29.6% factor?
A: After recomputing the federal Form 8801 for Nebraska, you multiply line 25 by 29.6% (.2960) to arrive at the Nebraska minimum tax credit.

Q: Where does the credit go for a nonresident estate or trust?
A: On line 29 of Nebraska Schedule I as a negative number. Resident estates and trusts use line 12 of Form 1041N.

Q: Does this still apply?
A: Only for tax year 2010 and other still-open earlier years. Nebraska eliminated its AMT for tax years beginning on or after January 1, 2014.

Citations and references

• Neb. Rev. Stat. § 77-2717 -- the adjustments used to recompute the federal credit for prior year minimum tax for Nebraska fiduciary purposes.
• Revenue Ruling 23-10-1 -- the companion 2010 fiduciary AMT recomputation this credit calculation relies on.
• 29.6% (.2960) -- the factor applied to the recomputed Form 8801 line 25 to compute the Nebraska minimum tax credit.

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/rr231002.pdf

Original ruling text

Revenue Ruling 23-10-2
Fiduciary Income Tax

February 22, 2011
COMPUTATION OF 2010 CREDIT FOR PRIOR YEAR MINIMUM TAX TO
DETERMINE NEBRASKA MINIMUM TAX CREDIT
FOR THE 2010 NEBRASKA RETURN
Issue:
How is the credit for prior year minimum tax computed on Credit for Prior Year Minimum TaxIndividuals, Estates, and Trusts, Federal Form 8801, for a taxpayer’s 2010 U.S. Fiduciary Income
Tax Return, Federal Form 1041, to be recalculated in order to compute the Nebraska tax credit?
Conclusion:
Neb. Rev. Stat. § 77-2717 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.
Analysis:
Nebraska Revenue Ruling 23-10-1 provides the adjustments for alternative minimum tax (AMT)
computations for Nebraska determinations. This ruling is to be used for purposes of calculating the
Nebraska credit for prior year minimum tax.
The specific line entries and the required adjustments in recomputing the credit for prior year
minimum tax for the 2010 Nebraska Fiduciary Income Tax Return, Form 1041N, are provided
below. Recalculate all total or computational lines to reflect adjustments made pursuant to
this ruling.
In completing the 2010 Federal Form 8801, use the amounts from the 2009 Federal Form 1041,
Schedule I, and Federal Form 8801 recomputed for Nebraska pursuant to Revenue Rulings 23-09-1
and 23-09-2.
2010 Federal Form 8801 (Credit for Prior Year Minimum Tax - Individuals, Estates,
and Trusts)
Part I —
•

Line 4. Use the federal instructions for calculating the amount to enter on line 4, and follow
Revenue Ruling 23-09-1 when completing any line 8 (tax-exempt interest or dividends)
or line 24 (alternative tax net operating loss) entries on the 2009 Federal Form 1041,
Schedule I.

•

Line 11. If Part III of Federal Form 8801 was used to make the line 11 entry, exclude
any capital gains in the calculation that were deducted on line 6 of the 2009 Nebraska
Form 1041N as a special capital gains exclusion.

•

Line 12. Enter -0-.

Follow federal instructions to recompute the net minimum tax on exclusion items through line 15
of the recomputed 2010 Federal Form 8801.

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

Revenue Ruling 23-10-2

February 22, 2011

Page 2 of 2

Part II:
•

Line 19. Enter the line 30 amount from the 2009 Federal Form 8801 recomputed pursuant
to Revenue Ruling 23-09-2.

•

Line 20. Enter -0-.

•

Line 22. Enter line 55 from the recomputed 2010 Federal Form 1041, Schedule I.

•

Line 23. Enter the line 54 amount from the 2010 Federal Form 1041, Schedule I, as
recomputed pursuant to Revenue Ruling 23-10-1.

Multiply line 25 of the recomputed 2010 Federal Form 8801 by 29.6 percent (.2960). Enter
this result on the Nebraska Fiduciary Income Tax Return, Form 1041N, as follows:
(a) Resident estates and trusts must enter the result on line 13 and write in the phrase,
“AMT Credit”; and
(b) Nonresident estates and trusts must enter the result on line 29, Nebraska Schedule I, and
write in the phrase, “AMT Credit”. Enter as a negative number, subtract from line 28, and
enter difference on line 30.
The Nebraska Minimum Tax Credit is a nonrefundable credit.
The recomputed Federal Form 8801 must be attached to the 2010 Nebraska Fiduciary Income Tax
Return, Form 1041N, when filed.
APPROVED:

Douglas A. Ewald
Tax Commissioner
February 22, 2011