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

That is because of the alternative minimum tax, which is designed to create a base tax rate for all earners. —Tanza Loudenback, wsj.com, 9 Nov. 2023

Both plans would repeal the estate tax, the alternative minimum tax, and the tax on investment income imposed by Obamacare. —Alex Raskolnikov, Foreign Affairs, 24 May 2017

The alternative minimum tax, or AMT, establishes a base tax rate for all earners. —Tanza Loudenback, wsj.com, 9 Nov. 2023

Estimated tax is used to pay income tax plus self-employment tax and alternative minimum tax. —Medora Lee, USA TODAY, 6 June 2023

Word History

First Known Use

1958, in the meaning defined above

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