Presideny Bush was expected to sign a bill Wednesday afternoon to provide greater AMT relief.
The bill will increase for tax year 2006 the AMT income exemption levels that were in effect for 2005. The new exemption levels will be $42,500 for single filers, up from $40,450, and $62,550 for joint filers, up from $58,000.

In addition, when calculating whether they're subject to AMT, taxpayers will be allowed to use all nonrefundable personal credits to offset AMT liability. Normally, these credits often end up being disallowed under AMT.

The JCT estimates that the provision agreed to by lawmakers will prevent an additional 15 million taxpayers from falling prey to the AMT in 2006.

Tax Policy Center estimates show the majority would come from households with income between $100,000 and $500,000, and their savings would range from $1,074 to $2,838.

The estimated cost of the provision over 10 years is $33.9 billion.

The AMT imposes a higher bill on taxpayers than the regular tax code.

The tax, originally intended for the wealthy, now threatens to catch tens of millions of middle-class taxpayers unless lawmakers continue to increase the AMT income exemption levels, since the original levels were never adjusted for inflation.


(Dan's editorial note. I love the fact that they will be taking a little less of YOUR money and refer to it as a "cost of the provision" like they are giving you something.)