Under the tax law, certain tax benefits can docHubly reduce a taxpayers regular tax amount. The alternative minimum tax (AMT) applies to taxpayers with high economic income by setting a limit on those benefits. It helps to ensure that those taxpayers pay at least a minimum amount of tax.
What triggers the alternative minimum tax?
Large deductions: Claiming docHub deductions for state and local taxes (SALT), medical expenses or home mortgage interest can increase the likelihood of triggering the AMT.
What are the new AMT rules for 2024?
The AMT exemption Before 2024, there was a standard $40,000 AMT exemption. Starting in 2024, the government increased the AMT exemption to the start of the fourth federal tax bracket, which started at $173,205 for 2024. For 2025, the AMT exemption is $177,882.
How is the percentage of AMT apportionment calculated in Colorado?
Its actually very simple, and very fair. You take your federal income from Form 6251, and then calculate what percentage of that income you earned in Colorado. Colorado AMT is 3.47% of that amount. Thats 3.47% of only the Colorado portion of your income.
At what income level does AMT kick in?
Taxpayers who have incomes that exceed the AMT exemption of $88,100 (single), $137,000 (married filing jointly) and $68,500 (married filing separately) in 2025 may be subject to the alternative minimum tax when they file their 2026 tax return. AMT tax rates are 26% or 28%.
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People also ask
How is the alternative minimum tax calculated in 2024?
AMT is calculated by applying a twotier graduated rate structure to alternative minimum taxable income (AMTI). For 2024, the rates are 26% on net AMTI up to $232,600 ($116,300 for married separate filers (MFS)) and 28% on net AMTI above that amount.
What is the phase out for AMT in 2025?
The exemption phaseout thresholds will drop to $500,000 for single filers and $1 million for joint filers in 2026. (In 2025, those amounts are $626,350 and $1,252,700, respectively.)
What is the alternative minimum tax in Colorado?
Colorado imposes an AMT rate of 3.47%. It generally follows federal AMT rules and calculation methods, with some adjustments specific to Colorado. Colorados AMT exemption amounts and phase-out thresholds are the same as the federal AMT exemption amounts and phase-out thresholds.
Related links
2024 Book 104, Colorado Individual Income Tax Filing Guide
Nov 26, 2024 You must submit the DR 0104PN along with the DR 0104. Line 13 Alternative Minimum Tax. Enter the amount of any Alternative Minimum Tax.
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