The "New" Alternative Minimum Tax

The 2017 Tax Act was signed into law on December 22, 2017. As part of the tax reform "simplification" process, there was a strong movement to eliminate the alternative minimum tax ("AMT") for corporations and individuals. The 2017 Tax Act does eliminate the corporate AMT but not the individual AMT. While the individual AMT was retained, it will now affect a much more narrow class of taxpayers as a result of increasing the income exemption levels as follows:

• The AMT exemption amount for joint filers is increased from US$84,500 to US$109,700 and for single filers from US$54,300 to US$70,300.
• More importantly, the AMT phase out level for joint filers was increased from US$160,900 to US$1,000,000 and for single filers to US$500,000 (the phase out level is that amount of alternative minimum taxable income ("AMTI") above which the AMT exemption phases out by 25¢ for each dollar of AMTI).