Order Code RS22083
Updated July 15, 2008
Alternative Minimum Taxpayers by State:
2005, 2006, and Projections for 2008
Steven Maguire
Specialist in Public Finance
Government and Finance Division
Summary
Personal exemptions, itemized deductions for state/local taxes, and miscellaneous
itemized deductions account for 96% of the preference items that are subject to tax
under the alternative minimum tax (AMT) but not subject to tax under the regular
income tax. As a result, over certain income ranges, taxpayers who claim itemized
deductions for state/local taxes, miscellaneous deductions, or have large families are
more likely to fall under the AMT than taxpayers who do not have these characteristics.
In 2006, 4.1 million taxpayers were subject to the AMT. New Jersey, Connecticut,
New York, the District of Columbia, and Maryland had the highest percentage of
taxpayers subject to the AMT. South Dakota, Tennessee, Alaska, Mississippi, and
North Dakota had the lowest percentage of taxpayers subject to the AMT.
In 2008, absent legislative change, according to the Joint Committee on Taxation,
some 25.7 million taxpayers will be affected by the AMT. At that time, whether a
married taxpayer has itemized deductions for state/local taxes or miscellaneous
deductions will become a much less important factor than it is at present in determining
AMT coverage. This occurs because, whether they itemize their deductions or not,
married taxpayers across a wide range of the income spectrum will be subject to the
AMT because personal exemptions are not allowed against the AMT. This report will
be updated as legislative action warrants or as new data become available.
The alternative minimum tax for individuals (AMT) was originally enacted to ensure
that high-income taxpayers paid a fair share of the federal income tax. However, the lack
of indexation of the AMT coupled with the recent reductions in the regular income tax
has greatly expanded the potential impact of the AMT.1
1 See CRS Report RL30149, The Alternative Minimum Tax for Individuals, by Steven Maguire.

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CRS-2
Temporary increases in the AMT exemptions expired at the end of 2007. If
legislative changes do not extend the expired changes, then the number of taxpayers
subject to the AMT will rise from around 5 million in 2007 to 24.2 million in 2008.
Further, by 2010, some 31 million taxpayers will be subject to the AMT.2 Taxpayers with
incomes in the $100,000 to $500,000 income range will be the hardest hit: 88% of these
taxpayers will be subject to the AMT in 2010.
Itemized deductions for state/local taxes (62.7%), personal exemptions (22.4%), and
miscellaneous itemized deductions (11.4%) together account for 96% of the preference
items that are subject to tax under the AMT but not subject to tax under the regular
income tax.3 As a result, over certain income ranges, taxpayers who claim itemized
deductions for state/local taxes, miscellaneous deductions, and/or have large families are
more likely to fall under the AMT than taxpayers who do not have these characteristics.
Table 1 and Table 2 show for 2005 and 2006, respectively, the percentage of
taxpayers in each state that were subject to the AMT. Of all the states, South Dakota,
Tennessee, Alaska, Mississippi, and North Dakota had the smallest percentage of
taxpayers subject to the AMT. In these five states, roughly 1% of taxpayers were on the
AMT in 2006. These are states in which either many taxpayers have relatively low
incomes, or state/local taxes that are deductible from the federal income tax are relatively
low. As a result of the combination of these factors, taxpayers in these states tend not to
itemize their deductions and hence, are less likely to be subject to the AMT than taxpayers
in other states.4
On the other hand, New Jersey, Connecticut, New York, the District of Columbia,
and Maryland were the states with the largest percentage of taxpayers subject to the AMT.
For instance, in New Jersey, about 65 out of every 1,000 taxpayers fell under the AMT
in 2006. In these states, many taxpayers have relatively high incomes and the state/local
tax burden is also relatively high. The combination of these factors produces a larger
number of itemizers and, consequently, a larger percentage of taxpayers being captured
by the AMT.
Note that absent legislative change (a patch), whether a married taxpayer has
itemized deductions for state/local taxes and/or miscellaneous deductions will become
a less important factor in determining whether taxpayers are subject to the AMT. This
will result because, if the AMT is not modified, then across a broad range of the income
spectrum all married taxpayers will be subject to the AMT whether they itemize their
deductions or not.
The potentially expanding impact of the AMT has been mitigated through temporary
increases in the basic exemption for the AMT and temporary changes that allow taxpayers
to use nonrefundable personal tax credits to reduce their AMT liabilities. The most recent
2 U.S. Congress, Joint Committee on Taxation, “Present Law and Background Relating to the
Alternative Minimum Tax,” JCX-38-07, June 25, 2007.
3 JCT, June 25, 2007, p. 18.
4 For more on the deductibility of state and local taxes, see CRS Report RL32781, Federal
Deductibility of State and Local Taxes, by Steven Maguire.

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CRS-3
increase in the basic AMT exemption occurred in December 2007 with the enactment of
the Tax Increase Prevention Act of 2007 (TIPA, P.L. 110-166). Under provisions of this
act, the AMT exemption for 2007 was set at $66,250 for joint returns and $44,350 for
unmarried taxpayers. In addition, this act allows taxpayers to temporarily use
nonrefundable tax credits to offset AMT liability. In 2008, the basic AMT exemption is
scheduled to decrease to its prior law level of $45,000 for joint returns ($35,750 for
unmarried taxpayers), and nonrefundable tax credits will not be allowed to offset AMT
liability.
Because the temporary patches to the AMT expired at the end of 2007, in 2008
roughly 21 million more taxpayers will likely be subject to the AMT.5 An increase of this
magnitude will affect taxpayers in every state, regardless of whether taxpayers in that state
itemize and deduct their state/local taxes and/or miscellaneous deductions from their
federal tax returns.
For example, in 2006, 27,217 taxpayers in Tennessee were subject to the AMT.
Thus, Tennessee taxpayers accounted for only 0.66% of the total AMT returns filed in the
United States that year. However, if that percentage remains constant, and the temporary
patches to the AMT expire, then in 2008 up to 159,000 (0.66% times 24.156 million)
taxpayers in Tennessee could be subject to the AMT.
Table 3 shows the potential number of AMT returns by state in 2008 if the
temporary patches to the AMT are not extended. The CRS calculations are an
extrapolation based on the assumption that the ratio of AMT taxpayers in each state to
total AMT taxpayers in the entire country will remain the same in 2008 as it was in 2006.
The methodology makes assumptions that could be challenged, but still provides a
reasonable estimate of the potential impact of the AMT in 2008 absent legislative
changes. The House Ways and Means Committee has released projections of the number
of AMT taxpayers by congressional district. These projections can be found on the
committee’s website.6
The Joint Committee on Taxation estimates that the one-year AMT patch for 2008
would reduce federal revenues by almost $61.5 billion over 10 years.7
5 JCT, June 25, 2007.
6 The congressional district projections for number of AMT filers in 2008 are at the following
website: [http://waysandmeans.house.gov/MoreInfo.asp?section=46], visited July 15, 2008.
7 U.S. Congress, Joint Committee on Taxation, “Estimated Revenue Effects of H.R. 6275, the
‘Alternative Minimum Tax Relief Act of 2008,’ Scheduled for Markup by the Committee on
Ways and Means on June 18, 2008,” JCX-51-08, June 17, 2008.

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CRS-4
Table 1. Number of Alternative Minimum Taxpayers by State, Tax Year 2005
(returns in thousands)
Number of
AMT returns as
Number of
AMT
AMT returns as
Rank
State
AMT returns
Rank
State
returns
% of total
returns
returns
% of total
U.S.A.
135,258
4,068
3.01%
47
Alabama
1,956
21
1.07%
32
Montana
448
8
1.79%
48
Alaska
347
3
0.86%
25
Nebraska
816
17
2.08%
27
Arizona
2,474
49
1.98%
38
Nevada
1,150
18
1.57%
39
Arkansas
1,154
17
1.47%
20
New Hampshire
650
15
2.31%
6
California
15,573
757
4.86%
1
New Jersey
4,153
283
6.81%
23
Colorado
2,160
46
2.13%
42
New Mexico
843
11
1.30%
3
Connecticut
1,682
99
5.89%
2
New York
8,716
523
6.00%
21
Delaware
403
9
2.23%
18
North Carolina
3,880
93
2.40%
4
District of Columbia
282
15
5.32%
46
North Dakota
307
3
0.98%
28
Florida
8,411
161
1.91%
12
Ohio
5,460
152
2.78%
15
Georgia
3,918
102
2.60%
40
Oklahoma
1,496
21
1.40%
22
Hawaii
621
14
2.25%
11
Oregon
1,645
48
2.92%
30
Idaho
614
12
1.95%
14
Pennsylvania
5,867
154
2.62%
13
Illinois
5,836
153
2.62%
9
Rhode Island
502
17
3.39%
41
Indiana
2,884
41
1.42%
31
South Carolina
1,885
35
1.86%
37
Iowa
1,347
22
1.63%
51
South Dakota
367
3
0.82%
24
Kansas
1,242
26
2.09%
49
Tennessee
2,658
25
0.94%
35
Kentucky
1,780
31
1.74%
34
Texas
9,728
172
1.77%
43
Louisiana
1,770
22
1.24%
29
Utah
1,031
19
1.84%
19
Maine
621
15
2.42%
16
Vermont
310
8
2.58%
5
Maryland
2,674
134
5.01%
8
Virginia
3,541
124
3.50%
7
Massachusetts
3,083
146
4.74%
36
Washington
2,932
50
1.71%
26
Michigan
4,563
93
2.04%
45
West Virginia
754
9
1.19%
10
Minnesota
2,446
74
3.03%
17
Wisconsin
2,656
65
2.45%
50
Mississippi
1,170
11
0.94%
44
Wyoming
248
3
1.21%
33
Missouri
2,611
47
1.80%
Source: Department of the Treasury. Internal Revenue Service, available at [http://www.irs.ustreas.gov/pub/irs-soi/05in54cm.xls], visited July 15, 2008.

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CRS-5
Table 2. Number of Alternative Minimum Taxpayers by State, Tax Year 2006
Number of
AMT returns as
Number of
AMT
AMT returns as
Rank
State
AMT returns
Rank
State
returns
% of total
returns
returns
% of total
U.S.A.
139,230,752
4,117,686
2.96%
45
Alabama
2,028,820
23,864
1.18%
33
Montana
465,929
8,442
1.81%
49
Alaska
341,329
3,469
1.02%
26
Nebraska
833,432
16,896
2.03%
28
Arizona
2,596,639
51,028
1.97%
40
Nevada
1,210,794
18,198
1.50%
43
Arkansas
1,184,565
16,828
1.42%
20
New Hampshire
660,961
14,917
2.26%
6
California
15,987,519
735,476
4.60%
1
New Jersey
4,229,622
273,589
6.47%
18
Colorado
2,228,867
52,903
2.37%
44
New Mexico
887,176
11,833
1.33%
2
Connecticut
1,714,027
96,823
5.65%
3
New York
8,964,337
493,391
5.50%
19
Delaware
412,049
9,628
2.34%
17
North Carolina
4,005,613
98,871
2.47%
4
District of Columbia
287,723
15,017
5.22%
47
North Dakota
314,622
3,651
1.16%
29
Florida
8,656,007
168,866
1.95%
14
Ohio
5,520,709
138,775
2.51%
15
Georgia
4,075,882
102,159
2.51%
39
Oklahoma
1,544,498
23,694
1.53%
24
Hawaii
638,212
13,428
2.10%
11
Oregon
1,695,185
48,753
2.88%
27
Idaho
641,026
12,623
1.97%
13
Pennsylvania
6,040,716
152,705
2.53%
12
Illinois
5,979,694
160,305
2.68%
9
Rhode Island
516,906
15,705
3.04%
41
Indiana
2,969,013
43,228
1.46%
30
South Carolina
1,948,517
37,513
1.93%
37
Iowa
1,378,083
22,905
1.66%
51
South Dakota
377,808
3,640
0.96%
23
Kansas
1,289,274
27,609
2.14%
50
Tennessee
2,742,268
27,127
0.99%
38
Kentucky
1,822,852
28,172
1.55%
34
Texas
10,090,061
180,948
1.79%
36
Louisiana
1,894,724
32,537
1.72%
25
Utah
1,075,222
21,922
2.04%
22
Maine
633,971
14,004
2.21%
16
Vermont
319,131
7,933
2.49%
5
Maryland
2,717,418
127,303
4.68%
8
Virginia
3,618,883
127,929
3.54%
7
Massachusetts
3,144,359
143,615
4.57%
32
Washington
3,017,975
54,697
1.81%
31
Michigan
4,655,310
89,131
1.91%
46
West Virginia
770,261
9,056
1.18%
10
Minnesota
2,559,718
74,282
2.90%
21
Wisconsin
2,737,590
61,727
2.25%
48
Mississippi
1,234,286
13,931
1.13%
42
Wyoming
257,852
3,703
1.44%
35
Missouri
2,720,684
48,385
1.78%
Source: Department of the Treasury. Internal Revenue Service, available at [http://www.irs.ustreas.gov/pub/irs-soi/06in54cm.xls], visited July 15, 2008.

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CRS-6
Table 3. Potential AMT Returns by State, Tax Year 2008
Potential AMT returns
Potential AMT returns
State
AMT returns in 2006
in 2008
State
AMT returns in 2006
in 2008
(CRS)
(CRS)
U.S.A.
4,117,686
24,156,000
Alabama
23,864
139,996
Montana
8,442
49,524
Alaska
3,469
20,351
Nebraska
16,896
99,119
Arizona
51,028
299,351
Nevada
18,198
106,757
Arkansas
16,828
98,720
New Hampshire
14,917
87,509
California
735,476
4,314,598
New Jersey
273,589
1,604,983
Colorado
52,903
310,350
New Mexico
11,833
69,417
Connecticut
96,823
568,003
New York
493,391
2,894,430
Delaware
9,628
56,482
North Carolina
98,871
580,017
District of Columbia
15,017
88,096
North Dakota
3,651
21,418
Florida
168,866
990,636
Ohio
138,775
814,110
Georgia
102,159
599,306
Oklahoma
23,694
138,999
Hawaii
13,428
78,774
Oregon
48,753
286,005
Idaho
12,623
74,052
Pennsylvania
152,705
895,829
Illinois
160,305
940,414
Rhode Island
15,705
92,132
Indiana
43,228
253,593
South Carolina
37,513
220,066
Iowa
22,905
134,370
South Dakota
3,640
21,354
Kansas
27,609
161,965
Tennessee
27,127
159,138
Kentucky
28,172
165,268
Texas
180,948
1,061,514
Louisiana
32,537
190,875
Utah
21,922
128,603
Maine
14,004
82,153
Vermont
7,933
46,538
Maryland
127,303
746,811
Virginia
127,929
750,483
Massachusetts
143,615
842,503
Washington
54,697
320,875
Michigan
89,131
522,878
West Virginia
9,056
53,126
Minnesota
74,282
435,768
Wisconsin
61,727
362,115
Mississippi
13,931
81,725
Wyoming
3,703
21,723
Missouri
48,385
283,846
Source: Calculations by CRS assuming that the ratio of AMT taxpayers in each state to total AMT taxpayers in the entire country will remain the same in 2008 as it was in 2006.
Projected Number of AMT taxpayers in the U.S. in 2008 are based on data from U.S. Congress, Joint Committee on Taxation, “Present Law and Background Relating to the Alternative
Minimum Tax,” JCX-38-07, June 25, 2007.

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