corner image

Selected state is header image tagline Financial Institutions PEO - Employee Leasing

2017 Alternative Minimum Tax

How to Calculate
Payroll Checks »

Instructions and
a list of things you'll need.

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax. This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT. The taxpayer then needs to pay the higher of the two.

The AMT uses an alternative definition of taxable income called Alternative Minimum Taxable Income (AMTI). To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI. However, this exemption phases out for high-income taxpayers. The AMT is levied at two rates: 26 percent and 28 percent.

The AMT exemption amount for 2017 is $54,300 for singles and $84,500 for married couples filing jointly (Table 7).

Table 7. 2017 Alternative Minimum Tax Exemptions

Filing Status Exemption Amount
Single $54,300
Married Filing Jointly $84,500
Married Filing Separately $42,250
Trusts & Estates $24,100
Source: IRS.

In 2017, the 28 percent AMT rate applies to excess AMTI of $187,800 for all taxpayers ($93,900 for married couples filing joint returns).

Under current law, AMT exemptions phase out at 25 cents per dollar earned once taxpayer AMTI hits a certain threshold. In 2017, the exemption will start phasing out at $120,700 in AMTI for single filers and $160,900 for married taxpayers filing jointly (Table 8.

Table 8. 2017 Alternative Minimum Tax Exemption Phaseout Thresholds

Filing Status Threshold
Single $120,700
Married Filing Jointly $160,900
Married Filing Separately, Estates and Trusts $80,450
Source: IRS.

To speak with an Online Payroll expert call • or contact us by email.

Learn more about managing your business | Independent Contractor | Employee Handbook Information | Acronyms for Payroll | Workers Compensation

Related pages

what is the income tax rate in illinoisfree online payroll tax calculatoryearly paycheck calculatorbonus tax rate texastax percentage in kansasnet pay calculator arkansasgeorgia state income tax deductionspercentage of taxes taken out of paycheck in palos angeles tax percentageexcel payroll calculatorhawaii sdi taxmichigan state income tax bracketsstate paycheck calculatorseattle income tax ratefree paycheck stub templatesmichigan income tax bracketswisconsin weekly unemploymentvirginia beach teacher salaryadp payroll calculator new yorknj w4 allowancespayroll calculator njbonus paycheck calculatorwisconsin weekly unemploymentga take home pay calculatorpaycheckcity calculator californiabi weekly take home pay calculatormerrimack county savings bank concordpayroll services sacramentohourly paycheck calculator nywhat is minimum wage in miami floridafed withholding calculator 2014maryland state tax deductionsutah withholding tablesfederal witholding calculatorpa sui taxadp paycheck calculator hourlyny unemployment tax ratesalary calculator minnesotaper diem little rock arweekly tax estimatormaine salary calculatornj sutaccra payroll calculatorpaycheck estimator ohiopayroll tax calculatorsminimum wage in montanatax deductions in texasquebec payroll calculatorirs form 940 for 2013paycheck withholding calculatororegon withholding taxhow much is the standard fica deduction from most paychecksirs payroll calculatorsuta massachusettswhat is the tax rate in tulsa oknevada federal tax ratepayroll tax online wafederal withholding tax calculatorpaycheck calculator philadelphiabest paycheck calculatorwhat payments are exempt from futa taxw4 calculator paychecksyringa bank boiseirs paycheck calculatorform 940 schedule a 2014montana wagesiowa sutany state withholding calculatornew york state payroll tax calculatorpennsylvania unemployment biweeklysalaries in vermontpay calculator michigannevada payrollindiana state tax brackets401k calculatorsindividual tax withheld calculatorw2 rate calculator