Will there be an AMT “patch” for 2012?

Without a change in the law, millions of taxpayers will incur AMT in 2012.

A special deduction called the AMT exemption amount protects most low- and middle-income taxpayers from paying AMT, but this number has not been permanently indexed for inflation. Instead, every year or two, Congress makes a temporary fix that has become known as the AMT patch. The most recent one covered 2010 and 2011. Both political parties agree on the need to prevent the AMT exemption amount from reverting to a lower level, but disagreement over the manner of doing this has made it difficult to enact the necessary legislation.

It is unlikely that Congress will wait until 2013 to extend the AMT patch, unless political gridlock prevented more expedient action. It is also likely that nothing will be done before the election in November.