“After vowing to kill it, Republicans kept this unpopular levy, but they revised it to affect far fewer people
The tax overhaul nearly repealed the alternative minimum tax, or AMT, a parallel tax system that is both complex and unpredictable. The purpose of the AMT is to limit tax breaks allowed by the regular tax system and ensure that high earners can’t legally avoid all taxes.
In the end, lawmakers retained the AMT, but with important changes. The changes expire at the end of 2025.
Far fewer people will owe the revised AMT, according to economist Joe Rosenberg of the Tax Policy Center. Mr. Rosenberg expects it to affect the filers of about 200,000 returns for 2018, down from five million filers for 2017.
This levy will also fall less heavily on the affluent and more heavily on very high earners than in the past. The number of people earning $500,000 or less who owe AMT will drop to about 50,000 for 2018 from about four million for 2017, according to Mr. Rosenberg.
Several triggers of the prior AMT have been reduced or repealed, helping to lower the number of taxpayers who owe it. These prior triggers include state and local tax deductions, personal exemptions and miscellaneous deductions. In addition, the AMT exemption was expanded.
Tax specialists say the breaks triggering the revised AMT are likely to be more unusual items, such as incentive stock options, interest from certain municipal bonds, and net operating losses.”