The details are coming forward as to what was passed. From current information, the following three changes seem to be the provisions with the greatest impact on staff. These are excerpted from a Davis and Kuelthau alert:
1. A patch for the alternative minimum tax ("AMT") for 2012, with additional changes to permanently index the AMT exemption and other AMT amounts to inflation to avoid future annual patches. For 2012, the AMT exemption amounts increased to $50,600 (single filing status) and $78,750 (married couples filing jointly).
2. Increase in employee Social Security withholding tax to 6.2% (up from 2012 level of 4.2%) for both employers and their employees. The two-year old 2% cut expired at the end of 2012, with reversion back to the prior rate.
3. Extension of certain tax credits and deductions for individuals, including the education tax credit, child tax credit and dependent care credit, relief from cancellation of debt income for principal residences, deduction for mortgage insurance premiums as interest and deduction for state and local general sales taxes.
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