A. Purpose

California tax law gives special treatment to some items of income and allows deductions and credits for some items of expense. Many individuals who benefit from these provisions must pay at least a minimum amount of tax and/or limit the amount of their credits.

Use Schedule P (540), Alternative Minimum Tax and Credit Limitations – Residents, to determine if:

You owe AMT.

Your credits must be reduced or eliminated entirely. Your credits may be limited even if you do not owe AMT, so be sure to complete Side 1 through Side 4 of Schedule P (540).