California C Corp AMT Exemption

[Maria]

Hello,

I am preparing a California C Corp return, the system calculates AMT tax for both federal and CA. Regular taxable income is 0 after NOL carryforward. After looking up a tax book, I found that small businesses are exempt from federal AMT, so I checked a box, the federal AMT tax is gone, but the state AMT is still there. I continued to look up the tax book, trying to find out if the state AMT should be removed as well but I haven't found anything.

Are california C corporations exempt from AMT tax?

Thanks.

[Armando Beaujolais]

Hello,

I am preparing a California C Corp return, the system calculates AMT tax for both federal and CA. Regular taxable income is 0 after NOL carryforward. After looking up a tax book, I found that small businesses are exempt from federal AMT, so I checked a box, the federal AMT tax is gone, but the state AMT is still there. I continued to look up the tax book, trying to find out if the state AMT should be removed as well but I haven't found anything.

Are california C corporations exempt from AMT tax?

Thanks.

California does not follow the federal exemption from AMT for small businesses. From the CA corporation instructions:

"California does not conform to the following federal AMT provisions:
• The elimination of AMT for small businesses."

Also,

"Who Must File. Corporations should file Schedule P (100) if the sum of: AMT
adjustments, preference items, loss denials, other items as specified under IRC Section 59, and state net income exceeds $40,000."

You can find the CA instructions by going to "Links" above, then "State Links," then "California."

[Maria]

I have the same answer from FTB

Thanks so much for your help. Actually today I called the California Franchise Tax Board hotline and a lady told me that California does not have the same rule on this. Previously I searched through the state input screen (we use Prosystems) but did not find a box to check.

A question like this should be answered by a person who is more experienced in our office. However, our office is so busy, everybody is busy doing their own stuff. No one has even 5 minutes to talk. I have been trying to solve my own problem, regardless the degree of complexity.

Again, thanks a lot for your input.

[Armando Beaujolais]

"A question like this should be answered by a person who is more experienced in our office. However, our office is so busy, everybody is busy doing their own stuff. No one has even 5 minutes to talk. I have been trying to solve my own problem, regardless the degree of complexity."

That's the exact reason this message board is so valuable. It's like having a bunch of tax professionals in the back room to bounce questions off. As long as you don't take the wrong side of the "Casual Partnership; Schedule C or Form 1065?" issue, everything will be fine.