What is the Alternative Minimum Tax?

The tax law gives preferential treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. Taxpayers who benefit from these provisions of the law may have to pay an additional tax called the alternative minimum tax. It is a separate tax computation that, in effect, eliminates many deductions and credits and creates a tax liability for an individual who would otherwise pay little or no tax.
 

Exemption amount.

The exemption amount on Form 6251, line 5, has increased to $73,600 ($114,600 if married filing jointly or qualifying widow(er); $57,300 if married filing separately). Also, the amount used to determine the phaseout of your exemption has increased to $523,600 ($1,047,200 if married filing jointly or qualifying widow(er)).

AMT tax brackets.

For 2021, the 26% tax rate applies to the first $199,900 ($99,950 if married filing separately) of taxable excess (the amount on line 6). This change is reflected on lines 7, 18, and 39.

Who Must File

Attach Form 6251 to your return if any of the following statements are true.

1. Form 6251, line 7, is greater than line 10.

2. You claim any general business credit, and either line 6 (in Part I) of Form 3800 or line 25 of Form 3800 is more than zero.

3. You claim the qualified electric vehicle credit (Form 8834), the personal use part of the alternative fuel vehicle refueling property credit (Form 8911), or the credit for prior year minimum tax (Form 8801).

For more information on this tax see the instructions for form 6251.