Over time, the individual income tax has been used as a vehicle to promote various social and economic goals. This has been accomplished by according preferential tax treatment to certain items of income and expense. The net result, however, has been an erosion of the individual income tax base. By taking advantage of the preferences and incentives in the tax code, some individuals can substantially reduce their income taxes. To make sure that everyone paid at least a minimum of taxes and still preserve the economic and social incentives in the tax code, Congress, in 1969, enacted the predecessor to the current individual alternative minimum tax (AMT). Since its inception, the value and effectiveness of the minimum tax has often been the subject of congressional debate. Recently, the combined effects of inflation and legislative reductions in the regular income tax enacted as part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), and the Working Families Tax Relief Act of 2004 (WFTRA) and their pending expiration increased congressional concern about the alternative minimum tax. Temporary increases in the basic exemption for the AMT and changes in the treatment of personal tax credits had been enacted in the past as a means of mitigating the interaction between reductions in the regular income tax and the AMT. In the 111 th Congress, the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5 ) included a one-year patch for the 2009 tax year. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ) patched the AMT for the 2010 and 2011 tax years. Near the end of the 112 th Congress in early 2013, the American Taxpayer Relief Act of 2012 (ATRA, P.L. 112-240 ) permanently indexed the parameters of the AMT for inflation beginning with the 2012 tax year. The so-called "permanent patch" of the AMT was estimated to reduce federal revenue by $1.816 trillion over the 2013 to 2022 budget window. As with recent AMT patch legislation, personal credits are also allowed against the AMT. This report provides a brief overview of the alternative minimum tax for individuals and discusses the issues associated with the current system. The report will be updated as legislative action warrants. The first individual minimum tax was enacted in 1969 and was an add-on minimum tax. That is, it was a tax that was paid in addition to the regular income tax. The tax rate for the add-on minimum tax was 10% and the tax base consisted of eight tax preference items, the most significant of which was the portion of capital gains income that was excluded from tax under the regular income tax. Since its enactment in 1969, the individual minimum tax has been modified numerous times, in 1971, in 1976, in 1977, in 1978, in 1982, in 1986, in 1990, in 1993, in 1997, in 1998, in 2001, in 2002, in 2003, in 2004, in 2006, in 2007, in 2008, and in 2009. The Tax Reform Act of 1976 was the first major modification, adding new preference items to the add-on minimum tax base and increasing the tax rate to 15%. Another major change occurred under the Revenue Act of 1978, which created the predecessor of the current alternative minimum tax (AMT). This was an entirely new tax which was assessed on a taxpayer's regular taxable income increased by certain itemized deductions and the excluded portion of capital gains income (capital gains income was dropped as a preference item under the add-on minimum tax). The tax rates on the alternative minimum tax ranged from 10% to 25%. The alternative minimum tax was payable to the extent that it exceeded the sum of the taxpayer's regular income tax liability and his add-on minimum tax liability. Between 1978 and 1982, individuals were subject to both the add-on minimum tax and the alternative minimum tax. Citing the need to simplify the system and focus the tax on high-income taxpayers, Congress, in provisions contained in the Tax Equity and Fiscal Responsibility Act of 1982 ( P.L. 97-248 ), repealed the add-on minimum tax, expanded the tax base of the alternative minimum tax, and changed the AMT tax rate to 20%. The Tax Reform Act of 1986 ( P.L. 99-514 ) substantially changed the alternative minimum tax. It increased the tax rate to 21%, changed the basic exemption amount, broadened the tax base, and revamped the alternative minimum tax credit. It also introduced a phase-out of the AMT exemption amount for taxpayers whose AMT taxable income exceeded certain limits. For taxpayers filing joint returns the AMT exemption was reduced by 25% of the amount by which the taxpayer's AMT taxable income exceeded $150,000 ($112,000 for single taxpayers and $75,000 for married taxpayers filing separately, trusts, and estates). By far, however, the most significant change affecting the AMT was indirect and resulted from modifications in the tax treatment of capital gains income under the regular income tax. Under pre-1986 law, 60% of a long-term capital gain was exempt from regular income taxes. The excluded portion of the gain, however, was taxable as a tax preference under the AMT. Since the 1986 Act repealed the exclusion for long-term capital gains income and capital gains income was taxed in full under the regular income tax, it was no longer taxed as a tax preference item under the AMT. This change substantially reduced the number of taxpayers subject to the AMT. The Revenue Reconciliation Act of 1990 ( P.L. 101-509 ) increased the AMT tax rate from 21% to 24%. Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ) made two major changes in the AMT. First, it increased the AMT exemption amounts from $40,000 to $45,000 for taxpayers filing joint returns, from $30,000 to $33,750 for taxpayers filing single returns, and from $20,000 to $22,500 for married taxpayers filing separately, estates, and trusts. Second, it created a two-tiered tax rate structure for the AMT. A 26% tax rate is applicable to the first $175,000 of a taxpayer's alternative minimum taxable income in excess of the exemption amount and 28% on alternative minimum taxable income in excess of $175,000. The Taxpayer Relief Act of 1997 ( P.L. 105-34 ) established that the maximum tax rate applicable to capital gains income under the regular income tax would also apply to capital gains income under the AMT. The Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999 ( P.L. 105-277 ) allowed the nonrefundable personal tax credits to offset an individual's regular income tax in full for tax year 1998 only, even though the personal tax credits might be larger than the amount by which the taxpayer's regular income tax exceeded his tentative minimum tax. In addition, it repealed, for tax year 1998 only, the provision that reduced the additional child tax credit by the amount by which an individual's AMT exceeded his regular income tax liability. Another legislative change in the AMT occurred in the Tax Relief Extension Act of 1999 ( P.L. 106-170 ) which extended, through December 31, 2001, the existing law tax provision that allows individuals to offset their regular income tax by the full amount of their nonrefundable personal tax credits regardless of the AMT. The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA; P.L. 107-16 ) allows the child tax credit, the adoption tax credit, and the IRA contribution tax credit to be claimed to the extent of the full amount of a taxpayer's regular income tax and alternative minimum tax. The act also temporarily increased the AMT exemption amount by $4,000 for joint returns ($2,000 for unmarried individuals) effective for tax years between 2001 and 2004. The Job Creation and Worker Assistance Act of 2002 (JCWAA; P.L. 107-147 ) extended the temporary provisions, first enacted in 1998, that allowed individuals to use all personal tax credits against both their regular and AMT tax liabilities. This change was effective through December 31, 2003. The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA; P.L. 108-27 ) increased the basic AMT exemption amount to $58,000 for joint returns and to $40,250 for unmarried taxpayers. These increases were in effect for tax years 2003 and 2004. JGTRRA also established that the new maximum tax rate of 15% applicable to capital gains and dividend income under the regular income tax would also apply to the taxation of capital gains and dividend income under the AMT. The Working Families Tax Relief Act of 2004 (WFTRA; P.L. 108-311 ) extended, through 2005, the JGTRRA increase in the basic AMT exemption amounts. WFTRA also extended the provision allowing nonrefundable personal tax credits to offset both regular and AMT tax liability in full for taxable years 2004 and 2005. The American Jobs Creation Act of 2004 (AJCA; P.L. 108-357 ) made several changes to the AMT. It coordinated farmer and fisherman income averaging with the AMT so that the use of income averaging did not push taxpayers into the AMT. It repealed the 90-percent limitation on the use of the AMT foreign tax credit. The act also allowed the credits for alcohol used as a fuel and electricity produced by renewable resources to be used in full against the AMT. The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA 2005; P.L.