Permanent AMT Patch

The American Taxpayer Relief Act of 2012, signed by President Obama on January 2nd, included a permanent AMT (Alternative Minimum Tax) Patch.

The AMT was first enacted in 1969 to make sure the ultra-rich paid their share of taxes. The problem was that it was never indicated for inflation. And as a result, Congress has had to act on a patch each year to adjust for it.

The signing of the permanent patch is helping millions of people avert the AMT by raising the exemption amounts to $50,600 for individuals and $78,750 for couples filing jointly. It also now allows nonrefundable personal credits.

More good news is that the exemption rate will rise as inflation does, it’s one less thing for Congress to deal with each year, and e-filing won’t be delayed because of it.