In 1990, 132,000 individual taxpayers paid alternative minimum tax (AMT), a tax created to ensure that high-income taxpayers paid their fair share of taxes. Because Congress has not indexed the AMT for inflation, increasing numbers of middle-income taxpayers will apparently end up footing the bill in the future. Unless things change, the nonpartisan Congressional Budget Office estimates that by the year 2016, AMT will affect 33 million taxpayers to the tune of $81 billion.

In December 2007 Congress passed legislation to temporarily "fix" the Alternative Minimum Tax rates. The Higher AMT exemption amounts are for 2007 only:

$44,350 for single taxpayers and heads of household

$66,250 for married couples filing jointly

$33,125 for married filing separately

Also for 2007 only, taxpayers may use nonrefundable personal credits (such as dependent care, HOPE and Lifetime learning education credits, and the District of Columbia first-time homebuyer’s credit) to offset AMT liability.