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Alternative Minimum Taxpayers by State , Record No.: RS22083, Date: March 17, 2005 1 (March 17, 2005)

handle is hein.tera/crstax0003 and id is 1 raw text is: Order Code RS22083 March 17, 2005 CRS Report for Congress Received through the CRS Web Alternative Minimum Taxpayers By State Gregg Esenwein Specialist in Public Finance Government and Finance Division Summary Personal exemptions, itemized deductions for state/local taxes, and miscellaneous itemized deductions account for 90% of the preference items that are subject to tax under the alternative minimum tax (AMT) but not subject to tax under the regular income tax. As a result, over certain income ranges, taxpayers who claim itemized deductions for state/local taxes, miscellaneous deductions, and/or have large families are more likely to fall under the AMT than taxpayers who do not have these characteristics. In 2003, New Jersey, New York, Connecticut, the District of Columbia, and California had the highest percentage of taxpayers subject to the AMT. Tennessee, South Dakota, Alaska, Alabama, and Mississippi had the lowest percentage of taxpayers subject to the AMT. It should be noted that absent legislative change, whether a married taxpayer has itemized deductions for state/local taxes and/or miscellaneous deductions will become a less important factor in determining AMT coverage. This will result because, if the AMT is not modified, then across a broad range of the income spectrum all married taxpayers will be subject to the AMT whether they itemize their deductions or not. This report will be updated as legislative action warrants or as new data become available. The alternative minimum tax for individuals (AMT) was originally enacted to ensure that high-income taxpayers paid a fair share of the federal income tax. However, the lack of indexation of the AMT coupled with the recent reductions in the regular income tax has greatly expanded the potential impact of the AMT. Temporary increases in the AMT exemptions are scheduled to expire at the end of 2005. If this occurs, then the number of taxpayers subject to the AMT will rise from around 2.3 million in 2003 to over 19 million in 2006. Absent legislation, by 2010, some 31 million taxpayers will be subject to the AMT. Taxpayers with incomes in the $100,000 Congressional Research Service Ae The Library of Congress 'See CRS Report RL30149, The Alternative Minimum Tax for Individuals, by Gregg Esenwein.

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