The Alternative Minimum Tax for Individuals: Legislative Activity in the 110th Congress , Record No.: RS22909, Date: July 01, 2008 1 (July 1, 2008)

handle is hein.tera/crstax0014 and id is 1 raw text is: Order Code RS22909
July 1, 2008
A CRS Report for Congress
The Alternative Minimum Tax for Individuals:
Legislative Activity in the 1 10th Congress
Steven Maguire
Specialist in Public Finance
Government and Finance Division
Jennifer Teefy
Information Research Specialist
Knowledge Services Group
Summary
The alternative minimum tax (AMT) for individuals was originally enacted to
ensure that all taxpayers, especially high-income taxpayers, pay at least a minimum
amount of federal taxes. However, the AMT is not indexed for inflation, and this factor,
combined with recent reductions in the regular income tax, has greatly expanded the
potential impact of the AMT. Temporary provisions intended to mitigate the effects of
the AMT expired at the end of 2006, and Congress worked throughout 2007 to enact an
AMT patch. The patch for the 2007 tax year, as provided for in the Tax Increase
Prevention Act of 2007 (P.L. 110-166), enacted on December 26, 2007, set the AMT
exemption levels for 2007 at $66,250 for joint filers and $44,350 for single filers.
The AMT exemption amounts for the 2008 tax year revert to $45,000 for joint
filers and $33,750 for single filers. Without a patch, roughly 26 million taxpayers will
be affected by the AMT in 2008. The FY2009 budget compromise, S.Con.Res. 70,
includes an offset AMT patch. On April 17, 2008, the Senate Finance Committee
released legislation, S. 2886, that would extend the AMT patch through 2008 and allow
the use of nonrefundable personal credits against AMT liability. S. 2886 does not
include offsets. More recently, Senator Baucus unveiled a substitute amendment to H.R.
6049 that would include an AMT patch without an offset and extensions of a variety of
expiring tax provisions that would be offset. Motions to proceed to H.R. 6049,
however, failed because the Senate was unable to invoke cloture on the measure on June
10, 2008, and again on June 17, 2008. On June 18, 2008, the House Ways and Means
Committee reported out H.R. 6275, which provides an AMT patch that is offset (the
patch is estimated to cost $61.8 billion). The House approved H.R. 6275 on June 25,
2008, as reported.
This report will be updated as legislative action warrants.
Congressional Research Service   The Library of Congress
Prepared for Members and Committees of Congress

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