2019 Alternative Minimum Tax or AMT

Is This An
Alternative?

The Alternative Minimum Tax (AMT) gives an alternative set of rules to calculate your taxable income. These rules determine the minimum amount of income tax that a person at a certain income level should be required to pay. If your regular tax liability falls below the Alternative Minimum Tax amount, you will have to pay the difference as additional Alternative Minimum Tax. You may have to pay some AMT if your adjusted income is greater than the AMT exemption amount for your filing status. When you prepare and eFile your tax return on eFile.com, the eFile app will automatically calculate any AMT based on your answers to several tax questions.

The AMT is a parallel tax system that Congress created as part of the Tax Reform Act of 1969. The original purpose of the AMT was to target a small number of high-income taxpayers who claim many credits and deductions and end up owing little or no income tax. The Alternative Minium Tax was intended to keep the tax system as fair as possible and to ensure that all Americans pay at least a minimum amount of income taxes. The problem with the AMT is that is was not indexed for inflation when it was introduced, and a number of middle-income taxpayers were subject to the AMT each year. In past years, Congress usually "patched" the AMT by raising the exemption amounts. Starting in 2013, the AMT was indexed for inflation.

Alternative Minimum Tax Rates

Tax Year
Amount
AMT Rate
2019
$0 - $194,8001)
26%
2019
Above $194,8001)
28%
2018
$0-$191,1001)
26%
2018
Above $191,1001)
28%
2017
$0-$187,8001)
26%
2017
Above $187,8001)
28%

 

AMT Exemption Amounts

Tax Year
Filing Status
AMT Exemption

 

How the AMT Works

The AMT rules require taxpayers to calculate their tax liability the normal way, and then to calculate it again based on the AMT rules. Any amount of income over the applicable AMT exemption amount may be taxed at the AMT rates. You can use nonrefundable credits to decrease the AMT that you owe.

When you start your return on eFile.com, we will determine if you are subject to the AMT, as well as calculate your tax for you. The e-File app will select the appropriate forms for your tax return. e-Filing gets your tax refund to you faster and greatly reduces the chances of making an error on the AMT or other tax calculations.

1) For married couples filing separately it's half of the respective amount shown.

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