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15820: AMT Changes (Drake18)


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How does the Tax Cuts and Jobs Act affect alternative minimum tax?

The Tax Cuts and Jobs Act has a substantial impact on the rules surrounding this tax for individuals and corporations. 

For individual filers, the alternative minimum tax exemption amount and phase out amounts for tax year 2018 are greatly increased. 

 Exemption amounts and Phase out for AMT
 Tax Year Single,
Head of Household
Married Filing Joint,
Qualifying Widower
Married Filling
Separately
 Exemption  Phase out  Exemption  Phase out  Exemption  Phase out
 2017  $54,300  $120,700  $84,500  $160,900  $42,250  $80,450
 2018  $70,300  $500,000  $109,400  $1,000,000  $54,700  $500,000

The AMT tax brackets have also been adjusted. For 2018, the 26% tax rate applies to the first $175,800 ($87,500 if married filing separately) of taxable excess over the exemption amount and the 28% tax rate applies to the taxable excess over the first $175,800 ($87,500 if married filing separately).

For corporations, the alternative minimum tax has been repealed for the taxable years starting after December 31, 2017 (or tax year 2018). Companies that have an alternative minimum tax credit for AMT paid in prior years will be allowed to use the credit, subject to limits, in full before 2022 using Form 8827. The credit is refundable during the period from 2018 to 2021. 

Note: With the repeal of corporation AMT, screen 4626 in the 1120 data entry and the Form 4626 are not available starting in Drake18.

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