2007 Changes

The following changes to the AMT went into effect for 2007. For more information, see Form 6251, Alternative Minimum Tax -- Individuals, and its instructions.

AMT exemption amount increased. The AMT exemption amount has increased to $44,350 ($66,250 if married filing jointly or qualifying widow(er); $33,125 if married filing separately).

AMT exemption amount for a child increased. The AMT exemption amount for a child under age 18 has increased to $6,300.

Hurricane Katrina additional exemption expired. The additional exemption for taxpayers who provide housing for a person displaced by Hurricane Katrina has expired. Therefore, the additional exemption amount (formerly line 6 of Form 8914) is no longer allowable for the AMT.

Deduction for qualified mortgage insurance premiums allowed for the AMT. In most cases, no AMT adjustment is required for the deduction of qualified mortgage insurance premiums.

Foreign Earned Income Tax Worksheet revised. The Foreign Earned Income Tax Worksheet in the Form 6251 instructions has been revised to reflect changes made by the Tax Technical Corrections Act of 2007.

Certain credits still allowed against AMT. The special rule that allows the credit for child and dependent care expenses, credit for the elderly or the disabled, education credits, residential energy credits, mortgage interest credit, and the District of Columbia first-time homebuyer credit to be applied against the AMT was scheduled to expire at the end of 2006. However, Congress has extended the special rule through 2007, so those credits can be applied against the AMT for 2007.

2008 Changes

The following changes to the AMT went into effect for 2008.

AMT exemption amount decreased. The AMT exemption amount has decreased to $33,750 ($45,000 if married filing jointly or qualifying widow(er); $22,500 if married filing separately).

AMT exemption amount for a child increased. The AMT exemption amount for a child whose unearned income is taxed at the parent's tax rate has increased to $6,400.

Certain credits no longer allowed against the AMT. The credit for child and dependent care expenses, credit for the elderly or the disabled, education credits, residential energy credits, mortgage interest credit, and the District of Columbia first-time homebuyer credit are no longer allowed against the AMT, and a new tax liability limit applies. This limit is your regular tax minus any tentative minimum tax (figured without any AMT foreign tax credit).

-27-MAR-2008