I live in California. After having paid AMT for the last few years, this is the first year when my regular taxes are higher than AMT. This seems to mean I have accrued AMT credit over the last few years that I can claim against my regular taxes this year. Note that the AMT from the last few years was due to state tax deductions and not due to things like ISOs.
Now, assume my AMT was $1k over regular taxes last year. Say I got a state tax refund as part of my last year's tax filing. As part of this year's filing, after recomputation of last year's taxes, it turns out all of that state tax is not taxable this year. However, as part of that recomputation for last year, the AMT over regular tax came out to be $500. Does that mean the AMT credit that I can carry forward is $1k or $500?