1040-US: Nonrefundable personal credits and the Tax Projection Worksheet

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Question

How does the Tax Projection Worksheet apply the nonrefundable personal credit ordering rules?

Answer

The Tax Projection Worksheet applies the nonrefundable personal credits against tax, limited by alternative minimum tax in the following order:

  1. Foreign tax credit
  2. Child and dependent care
  3. Credit for the elderly and disabled
  4. Credit for retirement savings contributions
  5. Child tax credit

For tax returns in which the taxpayer received the above-mentioned credits in the current year, UltraTax CS, when applicable, defaults the current year credit amount to the next year credit for the foreign tax credit, child and dependent care, and the credit for the retirement savings, or uses the amounts entered on Screen TPW-2 for the credits. These amounts are limited by next year's alternative minimum tax.

The Tax Projection Worksheet applies the following additional nonrefundable personal credits against tax. UltraTax CS does not default current year credit amount to the next year, but rather uses the data entered for the credits on Screen TPW-2.

  1. Nonbusiness energy property credit
  2. Qualified electric plug-in vehicle credit
  3. Alternative motor vehicle credit
  4. Qualified plug-in electric motor drive vehicle
  5. Mortgage interest credit
  6. D.C. First-Time Homebuyer credit
  7. Residential energy efficient property credit
  8. General business credit
  9. Other credits
  10. Adoption credit

Related topic: Tax Projection Worksheet FAQs (1040)

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