IRS Form 8827 is the one-page form a C corporation uses to claim the credit for prior-year minimum tax and to track any unused balance forward to the next year. To fill out IRS Form 8827, you carry the prior year’s unused credit onto Line 2, add any minimum tax paid last year on Line 1, calculate the current-year limitation on Lines 4 through 10 using your regular tax and tentative minimum tax, enter the smaller of the total credit or the limitation on Line 11, and put whatever is left over on Line 12 as next year’s carryforward. The completed form attaches to Form 1120, and the Line 11 amount flows to Schedule J, Line 5d.1Internal Revenue Service. Form 8827 (Rev. December 2025)
Most corporations filing today are working with a legacy carryforward from the pre-2018 corporate AMT, which the Tax Cuts and Jobs Act repealed for tax years beginning after December 31, 2017. Those credits did not disappear with the tax; they carry forward indefinitely until used up.2Internal Revenue Service. Form 8827 Credit for Prior Year Minimum Tax – Corporations If your prior-year Form 8827 still shows a balance on Line 12, you file this form again. Applicable corporations subject to the 15% Corporate Alternative Minimum Tax enacted in 2022 also use Form 8827, and both pools of credit combine on the same form. S corporations do not file it.
What to Pull Together First
Four documents cover almost everything you need on the form:
- Last year’s Form 8827. The Line 12 balance from that form becomes Line 2 on this year’s form.
- Last year’s Form 4626. Part II, Line 13 goes on Line 1. Enter zero if the corporation was not subject to any minimum tax last year, which is true for most filers still working through legacy credits.
- This year’s Form 1120. You need the regular tax liability, the allowable credits from Schedule J, Part I, Lines 5a through 5c, and any base erosion minimum tax under Section 59A.
- This year’s Form 4626, if applicable. Part II, Line 9 is the tentative minimum tax that goes on Line 9 of Form 8827.
If the corporation has been through an ownership change, also pull your Section 382 documentation. You will need it for Line 11.
Lines 1 Through 3: Total Credit Available
Line 1 is the AMT the corporation paid last year, taken from Part II, Line 13 of the prior-year Form 4626. For corporations working only with pre-2018 AMT credits, this is zero.
Line 2 is the carryforward from last year’s Form 8827, Line 12. This is where the bulk of a legacy credit sits.
Line 3 is Line 1 plus Line 2. That total is the credit potentially available this year, before the limitation is applied.
Lines 4 Through 10: The Limitation
The credit is capped. It can only offset the portion of your regular tax that sits above the tentative minimum tax, after other credits have already been applied. Lines 4 through 10 build that cap.
Line 4 is the corporation’s regular income tax liability for the year, as defined in Section 26(b). If the corporation received a positive Section 6226 adjustment from a partnership audit reported on Form 8978, include it here.
Line 5 is the base erosion minimum tax under Section 59A. Most domestic mid-size corporations enter zero. For an applicable corporation subject to CAMT, Section 53(e)(2) increases the limitation by the Section 59A tax, which can free up more of the credit.3Office of the Law Revision Counsel. 26 USC 53 – Credit for Prior Year Minimum Tax Liability
Line 6 is Lines 4 and 5 added together.
Line 7 is the sum of the corporation’s other allowable credits for the year: foreign tax credit, general business credit, and similar items. On Form 1120, these come from Schedule J, Part I, Lines 5a through 5c.
Line 8 is Line 6 minus Line 7. This is the Section 53(c)(1) limitation figure — the regular tax that remains after other credits.
Line 9 is the tentative minimum tax from this year’s Form 4626, Part II, Line 9. For corporations no longer subject to any minimum tax, this is zero, and the full Line 8 amount stays available.
Line 10 is Line 8 minus Line 9. If the result is zero or negative, enter zero; the credit is not usable this year because the tentative minimum tax already equals or exceeds what regular tax remains after other credits.
Lines 11 and 12: The Credit and What Rolls Forward
Line 11 is the credit you actually claim this year. Enter the smaller of Line 3 (the total credit available) or Line 10 (the limitation). That amount goes to Form 1120, Schedule J, Line 5d.
Line 11 also contains the ownership-change boxes. If the corporation went through an ownership change and Section 383 limits the pre-change credits, check the Section 383 box and attach a computation showing how the credit was split between pre-change and post-change periods, using the same ratable-allocation or closing-of-the-books method the corporation applied for its Section 382 limitation.1Internal Revenue Service. Form 8827 (Rev. December 2025) If Section 384 restricts pre-acquisition credits from offsetting tax on another corporation’s recognized built-in gains after a merger or acquisition, check that box as well.
Line 12 is Line 3 minus Line 11. Whatever is left carries forward to next year’s Form 8827, Line 2. There is no expiration on the carryforward. Record this number where you will find it a year from now, because it is the only figure that keeps the credit chain intact.
When Section 383 Applies
An ownership change under Section 382(g) generally happens when one or more 5-percent shareholders increase their aggregate ownership by more than 50 percentage points over a rolling three-year period. Section 383 then treats unused minimum tax credits the same way as net operating loss carryforwards: the amount of pre-change credit usable each year is capped by the Section 382 limitation.4Office of the Law Revision Counsel. 26 USC 383 – Special Limitations on Certain Excess Credits, Etc.
In practical terms, a large legacy credit balance can end up usable only in modest annual increments. If that describes your corporation, the Line 11 amount is not simply the smaller of Line 3 or Line 10; it is further reduced by the Section 383 cap, and the attached computation has to show the math.
Attaching and Filing the Form
Form 8827 is not filed on its own. Attach it to Form 1120 and file the complete return through the IRS Modernized e-File system, which is the standard channel for corporate returns.5Internal Revenue Service. Form 8827 – Credit for Prior Year Minimum Tax – Corporations Paper filers mail the return, with Form 8827 inside, to the service center designated for their location. Insurance companies taxed under Section 831(a) file Form 8827 with their return if they hold these credits.
Keep the Documentation Chain Intact
An AMT credit that has been carried forward since the 1990s is only as good as the paper trail behind it. The IRS expects records to be kept as long as they are needed to prove items on a return, and a live carryforward keeps the underlying calculations relevant every year the credit is still on the books.6Internal Revenue Service. Recordkeeping That means holding every prior Form 8827 and the Form 4626 that originally generated the credit.
Claiming more credit than you can support, or inflating the carryforward, exposes the corporation to the Section 6662 accuracy-related penalty of 20% of the resulting underpayment, which applies to negligence, disregard of rules, or a substantial understatement of income tax.7Internal Revenue Service. Accuracy-Related Penalty For corporations, a substantial understatement means the understatement exceeds the lesser of 10% of the correct tax or $10 million. If an audit lands on the credit and you cannot show the chain from Line 2 back to the original AMT payments, the credit gets disallowed even if the corporation actually paid the tax that produced it.