Federal AMT and the State Income Tax Deduction : Gateway to Reform

This article focuses on the total tax burden faced by wage earners and uses wages as a surrogate for any form of income not taxed at a differential rate. It varies income for single individuals across jurisdictions and assesses the relationship between wages, alternative minimum tax, and the potential state income tax deduction. The findings indicate that taxpayers are subject to the AMT if their wage level falls between specific lower and upper limits. For 2011 the maximum AMT liability for single taxpayers was at $306,000 in wages. Note that the AMT liability increases if there are AMT preferences or net positive AMT adjustments