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AMT Credit Relief

Here is an article explaining how the AMT Credit works.

http://www.fairmark.com/execcomp/credit-relief-1.htm

Beginning in 2007, certain taxpayers will be able to claim old unrecovered AMT credit even if it means getting a refund that exceeds the current year's tax.

On its last day in business, the 109th Congress passed a tax law that was primarily designed to extend certain tax benefits that expired at the end of 2005, but also dramatically changes the rules for claiming AMT credit. The new rule, which takes effect in 2007 and continues through 2012, provides long-overdue relief to many people who deserve it, but also a windfall to many people who don't. Perhaps the most striking aspect of the rule is the poorly designed phase-out rule. Within certain ranges of income people will face a marginal tax rate greater than 100% if their unrecovered credit is large enough. Some of these people have planning opportunities they should consider before the end of 2006.

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