Accounts & Services

Federal Alternative Minimum Tax

Some taxpayers may be subject to the Alternative Minimum Tax (AMT). The AMT calculation is separate from, but parallel to, the regular income tax system. Many income and expense items are treated the same way for both regular income tax and AMT purposes. However, certain deductions, which are allowed to taxpayers for regular income tax purposes, have been identified by Congress to be considered "tax preferences."

The AMT is applied instead of the standard income tax when a taxpayer has a high enough level of "tax preference items" (based on the items' total dollar value) or takes certain deductions (which are allowable in determining your regular taxable income). You should consult your tax advisor to determine if you are subject to the AMT.

A taxpayer will be subject to the higher of either their standard income tax liability or the AMT. For purposes of computing your AMT, some or all of your tax-exempt dividends from certain mutual funds may be treated as a "tax preference item."

To view the percentage of your fund's tax-exempt dividends that must be reported for AMT purposes, click here. If your fund does not appear in the table, please review your year-end statement with your tax advisor to verify if the fund's dividends must be reported for AMT purposes.

You may also download printer-friendly versions of the tax information that follows.

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