The alternative minimum tax (AMT) is a parallel tax system in the United States designed to ensure that taxpayers with high incomes pay a minimum amount of tax. The AMT was enacted in 1969 after Congress found that some wealthy taxpayers were using deductions and credits to avoid paying any income tax.
The AMT is calculated by adding back certain deductions and credits to your taxable income. These include deductions for state and local taxes, miscellaneous itemized deductions, and personal exemptions. The AMT also has its own set of tax rates, which are higher than the regular income tax rates.