The exemption amounts for the individual alternative minimum tax (AMT) have been increased for 2012 under the American Taxpayer Relief Act of 2012 (ATRA, H.R. 8) , which was signed into law on 2 January 2013.
The AMT exemption amounts for 2012 are as follows:
Married individuals filing joint return ($78,750)
Unmarried individuals ($50,600)
Married individuals filing separate returns ($39,375)
Prior to the enactment of the ATRA, the exemption amounts and other key elements of the AMT were not indexed for inflation. Over the past decade, Congress had enacted a series of temporary increases of the AMT exemption amounts and allowed non-refundable personal tax credits to reduce AMT liability. These measures were popularly referred to as the AMT patch.
Without the enactment of the ATRA, the AMT exemption amounts would have reverted to lower statutory amounts (i.e. USD $45,000 for married individuals filing joint returns, USD $33,750 for unmarried individuals, and USD $22,500 for married individuals filing separate returns) for 2012 and most non-refundable personal credits would have ceased to be allowed against the AMT.
The ATRA increases the AMT exemption amounts for 2012 and permanently adjusts the AMT exemption amounts for inflation for tax years beginning after 2012, with the result that temporary AMT patches will no longer be needed. The ATRA also permanently allows non-refundable personal tax credits to offset AMT liability.
In addition, the ATRA indexes other elements of the AMT for inflation after 2012, including the taxable excess amounts above which the 28% rate apples and the thresholds at which the exemption amounts begin to phase out.
©copyright IBFD. This article is part of a selection of daily news from the IBFD Tax News Service (TNS). All rights to the content reside with IBFD. Any use requires IBFD’s prior permission in writing.
Without the enactment of the ATRA, the AMT exemption amounts would have reverted to lower statutory amounts (i.e. USD $45,000 for married individuals filing joint returns, USD $33,750 for unmarried individuals, and USD $22,500 for married individuals filing separate returns) for 2012 and most non-refundable personal credits would have ceased to be allowed against the AMT.
The ATRA increases the AMT exemption amounts for 2012 and permanently adjusts the AMT exemption amounts for inflation for tax years beginning after 2012, with the result that temporary AMT patches will no longer be needed. The ATRA also permanently allows non-refundable personal tax credits to offset AMT liability.
In addition, the ATRA indexes other elements of the AMT for inflation after 2012, including the taxable excess amounts above which the 28% rate apples and the thresholds at which the exemption amounts begin to phase out.
©copyright IBFD. This article is part of a selection of daily news from the IBFD Tax News Service (TNS). All rights to the content reside with IBFD. Any use requires IBFD’s prior permission in writing.
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