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. In more recent years, however, 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 affecting people in a way that is unintended.  Read examples.
   
• It is a hidden tax, 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 projections

Projections without changes enacted in 2006:

Because of changes in 2006, fewer Minnesotans are impacted in the 2007 tax season.  However, changes still need to be made to the Minnesota AMT.

Projected number of filers who will pay AMT if mortgage interest were allowed as a deduction:

MNCPA solutions

• Revising the dependent deduction rules.
• Allow all home mortgage interest deductions
• Allowing the gambling loss deduction

How you can help

» Join the AMT Task Force