Form T691, Alternative Minimum Tax: Filing, Errors, and Carryover

Form T691 is where you calculate whether you owe federal Alternative Minimum Tax, and to fill out Form T691 you rebuild your taxable income under a stricter set of rules, apply a flat 20.5 percent rate above a $181,440 exemption for 2026, subtract a reduced share of your usual credits, and compare the result to your regular federal tax. If the AMT number is higher, the difference is what you owe, and it lands on line 41700 of your T1 return.¹

Do You Actually Need to File T691

Most taxpayers do not. The CRA’s line 41700 instructions include a screening test: total certain income items (including amounts from section B of line 41700 and the amount from line 19700 of Schedule 3), and if the total is at or below $177,882 for 2025, you almost certainly do not owe minimum tax and do not need to complete the form.¹ The 2026 threshold will be indexed slightly higher.

Above that line, AMT tends to appear when your return contains one or more of these:

Large realized capital gains, since AMT counts 100 percent of the gain rather than the regular partial inclusion.
Employee stock option benefits, because the paragraph 110(1)(d) deduction is denied entirely for AMT.
Rental or certified film property losses driven by capital cost allowance or interest.
Limited partnership losses that reduced your other income.
Flow-through share deductions or Canadian film tax credits that pulled your regular tax down sharply.

Two situations skip AMT entirely: the year a taxpayer dies and the year a taxpayer declares bankruptcy.² Trusts do not use T691 either; they calculate AMT on Schedule 12 of the T3 return.

What to Have in Front of You

Before opening the form, gather your completed T1 return, Schedule 3 (Capital Gains), and Schedule 4 (Statement of Investment Income). Most numbers on T691 are pulled directly from those documents, and the form is much faster to complete when you are copying rather than recalculating. You can download T691 from the CRA website, or let NETFILE-certified tax software generate it in the background.³

One caution on older guidance: Canada rebuilt the AMT regime for taxation years beginning after 2023. The old 15 percent rate and $40,000 exemption are gone. Any walkthrough dated before 2024 will lead you astray on both the rate and the add-backs.⁴

Working Through the Form

T691 walks the calculation in a set sequence. The work breaks into three stages.

Build Your Adjusted Taxable Income

Start with taxable income from line 26000 of your T1. Then work through each adjustment category on the form, adding back amounts that regular tax allows but AMT restricts or denies. The statutory basis for these add-backs is section 127.52 of the Income Tax Act.⁵ The main ones:

Capital gains: include 100 percent of net gains. Regular rules for 2026 include the first $250,000 of individual net capital gains at 50 percent and the excess at 66.67 percent; for AMT, the full gain counts.⁴
Employee stock option benefits: the paragraph 110(1)(d) deduction is unavailable, so the full taxable benefit is included.⁴
Rental and film property losses: losses from capital cost allowance and financing costs are added back to the extent they exceed net rental or film income.
Limited partnership losses: your share of losses that reduced regular income is reversed.
Charitable donations of listed securities: regular rules fully exempt the capital gain on donated publicly listed securities; for AMT, 30 percent of that gain is included.⁶
Canadian dividends: ignore both the gross-up and the dividend tax credit. Include the actual dividend received rather than the grossed-up amount.⁷

The result is your adjusted taxable income.

Apply the Exemption and Rate

Subtract the basic exemption from your adjusted taxable income. For 2026, the exemption is $181,440.⁸ Multiply the remainder by 20.5 percent. That figure is your gross AMT.

Reduce by the Allowed Share of Your Credits

Most non-refundable credits still apply, but only partially. The basic personal amount, age amount, disability credit, tuition credit, medical expense credit, and similar items count at 50 percent of their regular value for AMT purposes. The charitable donations credit counts at 80 percent.⁹ The dividend tax credit is not allowed at all.⁷

Subtract those reduced credits from the gross AMT. The final line on this section of T691 compares the net AMT to your regular federal tax. If AMT is higher, the excess goes on line 41700 of your T1 and is added to what you owe.¹ If your regular tax is higher, the form simply confirms nothing extra is owed.

Mistakes That Trigger a Reassessment

A few things routinely trip filers up:

Numbers on T691 that do not tie back to Schedule 3 or Schedule 4. If you corrected a capital gain on one form and not the other, the CRA’s automated review will catch it and reassess.
Claiming the dividend tax credit on the AMT side. The gross-up and credit are both stripped out; leave them off.
Forgetting a prior-year AMT balance. If you paid AMT in an earlier year, part of T691 handles the carryover claim for the current year, and skipping that section means leaving money on the table.

Filing T691 With Your Return

T691 is not filed on its own. It accompanies your T1 Income Tax and Benefit Return.

If you file electronically, certified NETFILE software bundles T691 into the transmission. You will not attach anything separately, but keep the completed form in your records in case the CRA asks to see it.¹⁰ If you file on paper, staple the completed T691 to your T1 and mail the package to the correct tax centre for your province:¹¹

Winnipeg Tax Centre (PO Box 14001, Station Main, Winnipeg MB R3C 3M3) for Alberta, British Columbia, Manitoba, Saskatchewan, Northwest Territories, Yukon, and certain Ontario tax offices (Hamilton, Kitchener, Waterloo, London, Thunder Bay, Windsor).
Sudbury Tax Centre (1050 Notre Dame Avenue, Sudbury ON P3A 5C2) for New Brunswick, Newfoundland and Labrador, Nova Scotia, Nunavut, Prince Edward Island, most other Ontario offices including Toronto and Ottawa, and Quebec residents in Montréal, Outaouais, and Sherbrooke.
Jonquière Tax Centre (2251 René-Lévesque Boulevard, Jonquière QC G7S 5J2) for all other Quebec areas.

Your Notice of Assessment will confirm whether the CRA accepted the AMT figure as filed or adjusted it, and will show any revised balance.

Recovering AMT You Paid in a Past Year

AMT is designed to work as a timing mechanism. Section 120.2 of the Income Tax Act lets you apply AMT paid in an earlier year against your regular federal tax in a later year, and the carryover calculation runs through T691 as well.¹² The window is seven years. AMT paid for 2019 must be used by the 2026 tax year or it expires.

To claim any carryover, your regular federal tax for the current year must exceed the AMT you would owe for that same year. The credit you apply in a given year is capped at that gap, and any unused balance keeps rolling forward within the seven-year window. Complete the carryover section of T691 and enter the result on line 40427 of your T1.¹⁰ Because the post-2024 rules can generate larger AMT amounts, using the full balance inside seven years may be harder than it was under the old regime, so track remaining balances against your Notice of Assessment each year.¹²

Provincial and Quebec AMT

T691 covers only the federal calculation. Most provinces and territories charge their own minimum tax as a percentage of the federal AMT, calculated on Form 428 for your province of residence, or on Form T2203 if you earned income in more than one jurisdiction.¹ There is no separate add-back exercise; the provincial number rides on the federal adjusted taxable income you already computed.

Quebec residents complete a separate Revenu Québec form, TP-776.42, in addition to T691, and Quebec tracks its own minimum tax carryover independently of the federal one.¹⁰

1
Canada Revenue Agency. Line 41700 – Minimum Tax
2
Wellington-Altus. Alternative Minimum Tax – When Does It Apply, How, And For Whom?
3
Canada Revenue Agency. T691 Alternative Minimum Tax
4
PwC Canada. Tax Insights: Changes to the Alternative Minimum Tax Are Enacted
5
Justice Laws Website. Income Tax Act RSC 1985 c 1 (5th Supp) – Section 127.52
6
Doane Grant Thornton. Alternative Minimum Tax: Will You or Your Trust Be Affected by Changes?
7
CIBC Private Wealth. The New Alternative Minimum Tax
8
ATB Financial. Navigating the New Realities of Alternative Minimum Tax
9
Parliamentary Budget Officer. Budget 2024 Update to the Alternative Minimum Tax
10
Canada Revenue Agency. Line 40427 – Minimum Tax Carryover
11
Canada Revenue Agency. Where to Mail Your Paper T1 Return
12
Tax Interpretations. 7 May 2024 CALU Roundtable Q. 11, 2024-1005801C6