23.4 AMT Tax Credit From Regular Tax

You may be able to reduce your regular 2012 tax by a tax credit based on AMT incurred in prior years. The prior-year AMT had to be attributable to “deferral items” such as the ISO adjustment or depreciation that provide only a temporary difference to taxable income. Furthermore, the credit, which is computed on Form 8801, is generally allowed only to the extent that your regular tax liability (as reduced by allowable tax credits) exceeds tentative alternative minimum tax liability computed on Form 6251.

However, a refundable credit may be allowed on Form 8801 if you have long-term unused minimum tax credits from prior years. The refundable credit primarily benefits taxpayers who incurred substantial AMT liability by exercising incentive stock options (ISOs).