 TITLE: What Is Alternative Minimum Tax? CONTENT: The AMT is a parallel tax system that has different rules, tax rates and calculations than the regular tax system. High-income earners who might be affected by the AMT must run their numbers through the regular tax system with its various exemptions and deductions and then go back and do their tax calculations again, using AMT criteria. Bottom line: They pay whichever amount is higher.\nSound unfair? Some taxpayers think so, but fairness is exactly what Congress had in mind back in 1969 when it began enacting laws to ensure that high-income taxpayers paid at least a minimum amount of tax and couldn't use loopholes to skirt their obligation.\nBecause of how Congress wrote the laws, however—particularly, not indexing exemptions for inflation—the AMT also began to affect middle-income households years after it was enacted, which was never the intention.\nThat changed with the Tax Cuts and Jobs Act of 2017 (TCJA), which made significant alterations to the regular tax system and the AMT. As a result, starting with the 2018 tax year and going through 2025 (when the changes are set to expire), the AMT will generally only affect certain households with incomes over $200,000. In fact, according to the Urban-Brookings Tax Policy Center, only an estimated 0.1% of all households will have to pay the AMT for the 2018 tax year. The majority of those make over $1 million. END