The legislation would extend the option to deduct state and local taxes instead of state and local income taxes, the above-the-line deductions for educator expenses and tuition and fees, the ability to make a tax-free direct transfer from an IRA to a qualified charity, and residential energy tax credits for two years - through tax year 2009.
On the AMT front, the bill increases the personal exemption amounts to $46,200 for individuals and $69,950 for married couples filing jointly for 2008 only. The proposal also allows the use of personal credits against the AMT, which is not allowed under current law. I guess they have given up on completely eliminating the dreaded AMT for the time being.
The lawmakers did not explain how the cost of the bill would be offset. The Finance Committee will take up consideration of revenue offsets in the near future.
Click here for a summary of the bill.