Bush Tax Plan - Alternative Minimum Tax

Factual Questions
1

This is possibly an ignorant question. My understanding of the Bush tax plan was that he mostly lowered the rates, but left the Altertnative Minimum Tax in place. This would seem to mean that for someone paying the AMT, the tax change will have no effect - his base tax will go down, but his AMT will go up by a corresponding amount.

And I also thought that the rebate checks now being sent out were merely the result of retroactively applying the Bush plan for 2000. (Maybe this is wrong, now that I think about it). If these assumptions are both true, then anyone who paid an AMT in 2000 should get no refund.

So I expected no refund, having paid a couple of hundred $ of AMT in 2000. But I just got a notice in the mail to expect a $600 check for Uncle Sam. Where am I going wrong? Possibly many places.

2

You’ll give it right back next year since I think that it is next years filing tax refund given back a few months early.

However, didn’t they adjust the AMT a tad? Enough to where you won’t have to pay a couple hundred bucks?

3

These are an advance against your 2001 returns. It makes the baby IRS cry when you call them refunds, but I’ve forgotten what we are supposed to call them. Your payroll department should be adjusting your withholding for the second half of 2001, this is the money you should have gotten for the first half of 2001.

No help for you on the AMT portion of the question. Sorry.