 |
 Single Mom
Shoreview, MN
This taxpayer is a single mom with one child. She has wages of about $38,000
and alimony income of $10,000. Her federal tax, after the $600 child tax credit,
was $441. There was no federal Alternative Minimum Tax (AMT).
Minnesota resulted in a regular tax of $773, already higher than the federal tax.
In addition, due to the disallowance of the residence mortgage interest and charitable
contributions of a little over $19,000, a Minnesota AMT of $568 also resulted.
Therefore, the total Minnesota tax was $1,341, or $900 more than the entire
federal tax.
If Minnesota law allowed the same deductions for AMT as federal law, there
would have been no Minnesota AMT.
 Retired Widow
Edina, MN
This taxpayer is a retired widow living on Social Security and income from
her investments. Her Social Security was just over $12,000 and her interest
and dividends were about the same. To meet living expenses, she sold stocks
that she had held for many years, which produced a capital gain of almost
$32,000. Her total Adjusted Gross Income was just over $57,000. Her total
federal tax was $542 and there was no federal Alternative Minimum Tax (AMT).
Minnesota resulted in a regular tax of $586, already higher than the federal
tax. In addition, due to the disallowance of the residence mortgage interest
and charitable contributions of almost $18,000, a Minnesota AMT of $381 also
resulted. Therefore, the total Minnesota tax was $967, or $425 more than the
entire federal tax.
If Minnesota law allowed the same deductions for AMT as federal law,
there would have been no Minnesota AMT.
 Big Family
St. Clair, MN
These taxpayers are a married couple with wages of $51,854. Their total AGI
was $54,104. They have 4 dependents. Their federal tax is $1,223, which is
reduced to zero with the child tax credit.
Minnesota’s regular tax liability is $720. AMT is an additional $92 due to
the disallowance of the taxpayer’s mortgage interest and the lower than federal
exemption amount of $40,000.
 Family with Many Deductions
New Brighton, MN
These taxpayers are married filing separately with W2 income of $25,300.
The taxpayer included the two children as dependents and itemized with $17,550
(state taxes, real estate taxes, mortgage interest, and charitable deductions).
The result was a negative income with zero federal tax liability.
The negative taxable income flowed to the Minnesota return. When the state
taxes were added back to the taxable income, the income was still negative.
The AMT tax calculation was based on the adjusted gross income of $25,300,
resulting in an AMT tax on the difference of $25,300 and the $20,000 AMT exemption
amount. The taxpayer was taxed on the $5,300 of income.
If Minnesota law allowed the same deductions for AMT as the Federal law,
there would have been no Minnesota AMT.
 Small Business Owner
West St. Paul, MN
This taxpayer is married and owns a small business in Falcon Heights.
Both he and his wife work in the small business. Their adjusted gross
income, which includes both of their salaries and their share of the small
business income, is less than $75,000.
After all of the deductions and the child tax credit, their total federal
income tax was $9,036. This includes $4,780 of federal AMT. The federal AMT
is due to reduced depreciation for AMT purposes.
Their Minnesota tax before AMT was $2,824. They then paid Minnesota AMT
of $1,862. This increased their tax by 65%. However, they were more upset
by the Minnesota AMT. Their home mortgage interest was under $10,000. If
they could have deducted their home mortgage interest, the Minnesota AMT
would have dropped over 33%.
How you can help
»
Join the AMT Task Force
» Learn more about AMT
conformity
|
AMT conformity
|
