What is AMT and why am I hearing about another patch?
AMT stands for the Alternative Minimum Tax. First introduced in 1969, the AMT was created to ensure that the wealthiest American households didn’t avoid paying income tax. Unfortunately, the AMT has not been adjusted for inflation over the years, and therefore, the tax now affects middle-income tax filers. The AMT was never intended to hit middle-income taxpayers, but without a ‘patch,’ 24 million more middle-income Americans could have fallen prey. Like the last several years, an AMT ‘patch’ for 2009 is part of this stimulus. Exemption amounts were also slightly increased from 2008 to $46,700 for individuals (up from $46,200) and $70,950 for couples filing jointly (up from $69,950).
