Just in time to replace the expired 2011 “patch” for the Alternative Minimum Tax (AMT) the American Taxpayer Relief Act of 2012 (ATRA) permanently extends AMT relief while retroactively increasing the AMT exemption for 2012.
The Wall Street Journal reported that “The bill represented the largest tax increase in the past two decades and was passed over opposition from conservative Republicans in the House who objected to the fact that it contained no long-term spending cuts of any significance.”
American Taxpayer Relief Act: Exemption for 2012 for unmarried individuals…
The American Taxpayer Relief Act increases the AMT exemption for 2012 for unmarried individuals to $50,600; for married taxpayers filing jointly and surviving spouses to $78,750; and for married taxpayers filing separately to $39,375. The 2013 AMT exemption is projected to be $80,750 for married taxpayers filing jointly and qualified widow(er)s, $51,900 for single and head of household taxpayers, and $40,375 for married taxpayers filing separately. This is based upon an annual inflation adjustment to the exemption for years beginning after 2012. Additional relief is provided for AMT by allowing non-refundable personal credits to the full amount of the individual’s regular tax and AMT to be used to offset AMT liability.
The New York Times wrote that “Just a few years ago, the tax deal pushed through Congress … would have been a Republican fiscal fantasy, a sweeping bill that locks in virtually all of the Bush-era tax cuts, exempts almost all estates from taxation, and enshrines the former president’s credo that dividends and capital gains should be taxed equally and gently. But times have changed, President George W. Bush is gone, and before the bill’s final passage … House Republican leaders struggled all day to quell a revolt among caucus members who threatened to blow up a hard-fought compromise that they could have easily framed as a victory.”
Acting Internal Revenue Service (IRS) Commissioner, Steven Miller, estimated that between 80 to 100 million taxpayers would have experienced a delay in filing their 2012 tax returns if Congress had failed to enact an AMT patch before the end of the year 2012. The AMT relief is expected to save over 60 million taxpayers from being subject to AMT for the 2012 tax year according to the IRS.