Calculating Colorado AMT

Colorado AMT is computed using the Colorado Alternative Minimum Tax Computation Schedule (DR 0104AMT). Individuals must first prepare IRS Form 6251 before completing Colorado form DR 0104AMT. In general, Colorado AMT is calculated in four steps:

A taxpayer’s federal alternative minimum taxable income is first reduced by the applicable federal exemption (please see IRS Form 6251 for the exemption amount).

The resulting amount is then modified by any applicable Colorado additions and subtractions (except for state income tax addback and the state income tax refund subtraction) in order to determine Colorado alternative minimum taxable income.

Next, Colorado tentative minimum tax is calculated by multiplying Colorado alternative minimum taxable income by 3.47% and, in the case of part-year residents and nonresidents, apportioning the result as described in the instructions for form DR 0104AMT.

Finally, Colorado alternative minimum tax is calculated by subtracting the taxpayer’s normal Colorado income tax from the taxpayer’s tentative Colorado minimum tax.

If a taxpayer’s tentative Colorado minimum tax is less than their normal Colorado income tax, the taxpayer owes no Colorado AMT. See form DR 0104AMT for additional information regarding the calculation of AMT.