Some AMT Filers Might Benefit from Claiming Sales Tax Deduction
A possible tax saver for certain filers in 12 states
Taxpayers subject to the Alternative Minimum Tax (AMT) who live in certain states, might be able to lower their state tax liability by claiming a sales tax deduction, rather than taking the deduction for state and local income taxes.
This applies in these 12 states:
- New York
- North Dakota
How does this work?
If you are subject to AMT, you don't get a tax benefit from deducting state and local income taxes or sales taxes on your federal return. However, the 12 states listed above allow you to deduct sales tax paid on your state return. So choosing to deduct sales tax, rather than state income tax, on your federal return could give you a bigger deduction on your state return.