The current situation with Alternative Minimum Tax (AMT) is that potentially 100 million US taxpayers may experience a delay in being able to file their 2012 return.

The problem is that there is a delay in issuing a fix, or a patch, to increase the exemptions under which no AMT applies. AMT is nick-named a wealth tax and usually hits high-income tax earners, with an exemption adjusted for inflation effective by way of the patch. Up until now, Congress has enacted a patch to adjust the exemption levels for inflation below which AMT does not apply.

As a symptom of the fiscal cliff, there has been no patch yet for 2012. If and when this occurs the Internal Revenue Service will need to change its systems which is why there is a potential delay in filing returns estimated to be as late as March. In addition, up to 30 million additional taxpayers face an AMT liability for 2012 in the absence of a patch, caused by AMT hitting lower income earners than what it is intended to.