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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 should you 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:
| Year |
Minnesotans paying AMT |
Amount paid |
| 1985 |
3,342 |
$13.75 million |
| 1995 |
5,300 |
$18.42 million |
| 2001 |
30,000 |
$33 million |
| 2007 |
125,000 |
$102.3 million |
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:
| Year |
Minnesotans paying AMT |
Amount paid |
| 2006 |
8,000 |
$16.2 million |
| 2007 |
2,000 |
$11.4 million |
MNCPA solutions
- Revising the dependent deduction rules.
- Allow all home mortgage interest deductions
- Allowing the gambling loss deduction
How you can help
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AMT conformity
GR Issues
MNCPA AMT Task Force membersJohn Almquist
Smith Schafer & Associates, Ltd. Bruce Carlson
Brunberg Blatt and Company, Inc. Michael Casserly
Lurie Besikof Lapidus & Company LLP James Daleiden
Boulay, Heutmaker, Zibell & Co. PLLP Todd Koch
John A. Knutson & Company PLLP David Levi
CBIZ & Mayer Hoffman McCann PC Ruth Ann Michnay
Ruth Ann Michnay PA Carl Peterson
Peterson, Peterson & Associates, PLC Barbara Renner
Deloitte & Touche LLP Jerry Riegel
DS&B, Ltd. Duane Thompson
Eide Bailly LLP Jean Wicks
Virchow, Krause & Company, LLP Eric Wille
Schechter Dokken Kanter, CPAs » Join this committee
 MNCPA legislative issues committee member, Jerry Brown (left), talks with Senator Dick Day (R-Owatonna).
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