Form 6251 (2021) — Alternative Minimum Tax For Individuals
Purpose and 2021 Context
Form 6251 computes alternative minimum tax liability for individual filers in the 2021 tax year. The Tax Cuts and Jobs Act established inflation-adjusted exemption amounts that remain in effect through 2025, with 2021 amounts set at $73,600 for single filers, $114,600 for married filing jointly, and $57,300 for married filing separately.
Part III capital gains computation uses 2021-specific rate breakpoints of $80,800 for married filing jointly, $40,400 for single and married filing separately, and $54,100 for head of household at the 0% rate threshold, with 20% rate thresholds of $445,850 for single filers and $501,600 for married filing jointly.
The 2021 instructions clarify interaction with Schedule 2 line 1 for reporting final AMT and provide expanded guidance on passive activity adjustments under current regulations. The 28% AMT rate applies to alternative minimum taxable income exceeding $199,900 for all taxpayers except married filing separately, where the threshold drops to $99,950. Exemption phase-out begins at $523,600 for single and head of household filers and $1,047,200 for married filing jointly.
Line-by-Line Completion Requirements
Part I: Alternative Minimum Taxable Income
Enter adjusted gross income or loss from Form 1040 or Form 1040-SR line 15 on line 1. If line 15 shows zero or a negative amount, compute the difference between lines 11 and 14 from the primary return and report it as a negative amount if necessary. This baseline amount differs from simplified AGI carryover methods used in earlier years.
Report state and local taxes from Schedule A line 7 on line 2a if filing itemized deductions. The amount entered reflects taxes already subject to the $10,000 SALT limitation under current law. If you claim the standard deduction instead of itemizing, enter the standard deduction amount from Form 1040 or Form 1040-SR line 12a on line 2a.
Complete all applicable adjustment lines 2b through 2r and line 3 by incorporating only differences between regular tax treatment and AMT treatment. The 2021 instructions address qualified business income from Schedule C and passive activity losses under Section 469.
These items generate AMT add-backs when deductible for regular tax but limited or deferred for AMT.
Calculate the exemption on line 5 using the 2021-specific thresholds listed above for each filing status. The exemption is reduced by 25 cents for every dollar that line 4 AMTI exceeds the phase-out threshold. Complete the Exemption Worksheet if line 4 exceeds $523,600 for single or head of household, $1,047,200 for married filing jointly, or $523,600 for married filing separately.
Part II: AMT Calculation and Regular Tax Comparison
Apply the 2021 AMT rate structure on line 7 by following these steps:
- Multiply line 6 by 26% if line 6 does not exceed $199,900 for most filers or $99,950 for married filing separately.
- Multiply line 6 by 28% and subtract $3,998 for most filers or $1,999 for married filing separately if line 6 exceeds the threshold.
- Complete Part III using the maximum capital gains rates worksheet if you report capital gain distributions, qualified dividends, or Schedule D gains.
Enter AMT foreign tax credit on line 8 if applicable. The 2021 instructions clarify that this credit computes separately from the regular tax foreign tax credit. The credit cannot exceed AMT liability before the credit under Internal Revenue Code Section 59(b) as modified by current law.
Calculate the tentative minimum tax on line 9 by subtracting line 8 from line 7. This amount represents the floor AMT before comparison to regular tax liability.
Complete line 10 by adding Form 1040 or Form 1040-SR line 16 minus any tax from Form 4972 plus Schedule 2 line 2. Subtract Schedule 3 line 1 from the result. Subtract any negative amount from Form 8978 line 14 by treating the negative as a positive number. Enter zero if the result falls below zero.
Determine final AMT on line 11 by subtracting line 10 from line 9. Enter zero if the result falls below zero. Transfer the line 11 amount to Schedule 2 line 1 for inclusion on Form 1040 or Form 1040-SR.
Part III: Capital Gains Computation
Enter line 6 alternative minimum taxable income on line 12 as the starting point for capital gains rate calculations. Source the applicable amount from either the Qualified Dividends and Capital Gain Tax Worksheet or the Schedule D Tax Worksheet, refiguring amounts for AMT if necessary.
Follow the line-by-line instructions through line 40 to apply preferential capital gains rates. The 0% rate applies to amounts up to the thresholds listed in line 19. The 15% rate applies to amounts between the 0% threshold and the 20% threshold listed in line 25. The 20% rate applies to amounts exceeding the line 25 thresholds.
Enter the smaller of line 38 or line 39 on line 40. Transfer the line 40 amount to line 7 to replace the standard computation for filers with capital gains or qualified dividends.
Special Situations and Adjustments
● Refigure depreciation for property placed in service after 1986 using alternative depreciation system methods when required by line 2l instructions.
● Track passive activity gains and losses separately for AMT by completing an AMT version of Form 8582 without filing it.
● Calculate alternative tax net operating loss deductions with the 90% AMTI limitation unless the loss qualifies for special disaster or carryback provisions.
● Adjust incentive stock option exercises on line 2i by reporting the excess of fair market value over exercise price at the time rights become transferable.
● Refigure gains and losses from property dispositions on line 2k by accounting for different basis amounts under AMT rules.
Filing Requirements and Form Attachment
Attach Form 6251 to your return if line 7 exceeds line 10, if you claim general business credits with Form 3800 amounts on specific lines, or if you claim qualified electric vehicle credits or prior year minimum tax credits. Complete all applicable sections even if the final alternative minimum tax equals zero, as the tentative minimum tax calculation may affect credit limitations. Retain AMT versions of worksheets and supporting schedules for your records without filing them with your return.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
