Alternative Minimum Tax (AMT) Overview
What is the AMT?
The AMT is a complex tax that operates in parallel to the regular income tax. Dating back to 1969, the AMT was originally designed to prevent ultra-wealthy taxpayers from offsetting their incomes with big deductions. However, in more recent years the AMT has crept up on middle-class taxpayers, leaving many of them financially devastated. We have made significant progress toward conformity, but there still are a number of items causing Minnesotans to be adversely impacted by the AMT.
Why you should care
- The current tax policy is still affecting people in a way that is unintended.
- It is a hidden tax that is hard to understand and causes less compliance. Less compliance means more administrative burdens for the state. Many people who do not use a CPA may not even know they are supposed to pay this tax, and therefore, do not.
- In Minnesota, the state preferences are contributing to the problem. Minnesota does not allow deductions for home mortgage interest or gambling losses.
Minnesota AMT
| Year |
Minnesotans paying AMT |
Amount paid |
| Projected 2010 |
18,400 |
$29.1 million |
| 2007 |
16,000 |
$24.2 million |
| 2006 |
14,000 |
$25.1 million |
| 2005 |
55,500 |
$42.5 million |
| 2004 |
39,000 |
$32.1 million |
| 2001 |
30,000 |
$33 million |
| 1995 |
5,300 |
$18.42 million |
| 1985 |
3,342 |
$13.75 million |
Changes in 2006, resulted in fewer Minnesotans paying AMT. However, the number of people impacted continues to grow.
Projected number of filers would have paid AMT if mortgage interest were allowed as a deduction:
| Year |
Minneotans paying AMT |
Amount paid |
| 2010 |
11,400 |
$22.1 million |
| 2007 |
2,000 |
$11.4 million |
| 2006 |
8,000 |
$16.2 million |
MNCPA solutions
- Allow all home mortgage interest deductions
- Allowing the gambling loss deduction
How you can help
Join the AMT Task Force