alternative minimum tax

noun

: a U.S. federal income tax that was originally imposed to prevent wealthy taxpayers from using tax shelters to avoid paying taxes, that excludes many deductions and exemptions allowed in computing regular tax liability, and that must be paid instead of the regular tax liability by individuals and businesses whose alternative minimum tax liability is greater than their regular tax liability

Examples of alternative minimum tax in a Sentence

Recent Examples on the Web

Legislators often are not fully cognizant of the unintended consequences of tax legislation, including BEAT provisions, alternative minimum tax provisions and corporate tax rates. —George Strobel, Forbes, 20 Feb. 2025

The plan also considers eliminating the inheritance tax and doing away with the Inflation Reduction Act’s alternative minimum tax for corporations. —Tobias Burns, The Hill, 17 Jan. 2025

But step lightly since packing your SALT deductions into 2026 could impact your alternative minimum tax. —Kelly Phillips Erb, Forbes, 24 Dec. 2024

The alternative minimum tax exemption is also set to increase to $85,700 for individuals, phasing out at $609,350, and $133,300 for married couples filing jointly, phasing out at $1,218,700. —Addy Bink, The Hill, 17 Dec. 2024

Word History

First Known Use

1958, in the meaning defined above

Rhymes for alternative minimum tax

• almanacs
• carrybacks
• haversacks
• lumberjacks
• maniacs
• microcracks
• minimax
• paperbacks
• parallax
• quarterbacks
• sticklebacks
• telefax

Legal Definition

alternative minimum tax

noun

: a federal tax that prevents a person or entity (as a corporation) with taxable income from avoiding tax liability and that imposes tax liability in the amount of the excess of the tentative minimum tax over regular tax liability see also tax preference item