Publication Date: December 2006
Publisher: Tax Policy Center
Author(s): Leonard E. Burman; Carol Rosenberg
Research Area: Banking and finance
Keywords: Tax Policy; Tax Distribution and Economic Trends; State and Local Issues; Taxation of Households
Many taxpayers must calculate their federal income tax liability under two sets of rules: those applying to the regular income tax and those of the alternative minimum tax. If a taxpayer owes more tax under the alternative rules, then the difference is paid as AMT. The AMT hits people in some states harder than it does in others because state and local income and property taxes are not allowed as itemized deduction against the AMT and because states vary based on the income of their residents. This column discusses AMT participation rates by state and the general expansion of the AMT across all the states.
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