Glossary · Income Tax
AMT
An alternative minimum tax applicable to certain non-corporate taxpayers when regular tax falls below a share of adjusted total income.
Alternate Minimum Tax (AMT) applies mainly to persons other than companies whose income-tax liability, after claiming certain deductions, is below the prescribed percentage of their “adjusted total income”. Like MAT for companies, tax is effectively paid at the higher of the two, and the excess can be carried as a credit for use in future years. The rate and the deductions that feed adjusted total income are governed by the Income Tax Act.
Examples
A professional claiming significant deductions may be brought within AMT if the regular tax on their adjusted total income drops below the prescribed threshold.