Form 8827

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What Is Tax Form 8827

IRS Form 8827, officially titled "Credit for Prior Year Minimum Tax—Corporations," is used by corporations to calculate and claim a credit for the alternative minimum tax (AMT) paid in prior tax years. This form enables eligible corporations to reduce their current year's tax liability by utilizing credits generated from AMT paid previously. This is particularly relevant for corporations that may have been subject to the AMT in one tax year and are able to carry forward excess credits to subsequent years.

When to Use IRS Form 8827

Certain situations necessitate the use of Form 8827 by corporations:

  • Carrying forward a minimum tax credit from the previous year to the current tax year.
  • Accounting for the corporation's regular income tax liability after allowable tax credits.
  • Computing the refundable minimum tax credit available for the current tax year.
  • Determining any restriction on the credit due to post-1986 ownership changes or pre-acquisition excess credits as per sections 382 and 383 of the Internal Revenue Code.
  • Evaluating the limit on using pre-acquisition excess credits to offset tax liability attributed to recognized built-in gains of another corporation under section 384.

How To Fill Out Form 8827 Instruction

To ensure compliance with IRS requirements and accurately claim your Credit for Prior Year Minimum Tax, please follow these step-by-step instructions for completing IRS Form 8827.

Step 1: Fill in the Basic Information

At the top of the form, enter the name of the corporation and the Employer Identification Number (EIN).

Step 2: Line 1 - Minimum Tax Credit Carryforward

Enter the minimum tax credit carryforward amount from the prior year.

Step 3: Line 2 - Regular Tax Liability

Calculate the corporation's regular tax liability by subtracting allowable tax credits from the income tax liability. Do not include any credits that are not allowed.

Step 4: Line 4 - Sum of Tax Liability and Refundable Credit

Add the amounts from lines 2 and 3 to calculate the sum of the corporation's regular tax liability and refundable minimum tax credit.

When to File Form 8827

Form 8827 should be filed with the corporation's tax return for the year the credit is being claimed. The form is necessary for a corporation to apply its carryforward credit against this year's tax liability or to claim a refundable credit amount. It's imperative to check the current tax year's deadlines for corporate tax returns and ensure that Form 8827 is included with the filing. The exact timing can vary based on the corporation's tax year and any applicable extensions.

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