,
The Act sets out that there will not be discrimination merely because the amount of life insurance provided to employees bears a uniform relationship to compensation. It is unclear yet as to whether the present regulations permitting bracket coverage where employees in certain salary ranges are provided certain coverages are valid under the Act. For example, under present regulations an employer may set up categories in which employees earning $10,000.00 to $20,000.00 per year obtain insurance in an amount equal to 200% of salary with employees earning $20,000.00 to $30,000.00 per year obtaining insurance coverage in the amount of 250% of their salary. It is possible that such categories will be considered discriminatory. TAXING UNEMPLOYMENT COMPENSATION If the unemployment benefits received by a taxpayer added to disability payments, otherwise eligible for exclusion, added to the deduction for two earner married couples and other adjusted gross income exceeds the statutory base amount then the taxpayer must include in income the smaller of the amount of unemployment compens.ation or one-half the amount of the excess by which the above total exceeds the base amount. Prior to the Act the base amount was $25,000.00 for a married individual filing a joint return, "0" for a married taxpayer filing separately and $20,000.00 for all others. The 1982 Act lowers the base amount for married taxpayers filing jointly to $18,000.00. It retains the "0" amount for married taxpayers filing separately and lowers the amount for all others to $12,000.00'. This change applies to unemployment compensation paid in tax years ending after 1981, thus this provision is retroactive to benefits paid in 1982. Individuals who end up underpaying their estimated tax because of the retroactive nature of this change will not be subject to penalty'. ALTERNATIVE MINIMUM TAX The Act repeals the add on minimum tax and expands the alternative minimum tax for tax years beginning after 1982. The tax preferences under the new law include those under previous law plus some additional new ones. The alternative minimum tax under
the Act is computed by first computing the taxpayer's "alternative minimum taxable income" (explained below). This figure is then reduced by the appropriate exemption and multiplied by a 20% rate. If the resulting figure exceeds what the taxpayer would owe using the standard method of computation (that is his regular tax) then the amount by which the regular tax is exceeded is added to the regular tax'. The taxpayers alternative minimum taxable income is computed by starting with the taxpayers adjusted gross income, computed without regard to regular net operating losses. Adjusted gross income is then added to the amount of the taxpayers tax preferences (defined below) for the year. This figure is then reduced by special alternative minimum tax net operating losses (explained below) and further reduced by special itemized deductions and by any trust distributions included in income under the "throwback" rules". The result of this computation is the taxpayers "alternative minimum taxable income". As stated before, this figure is then reduced by the amount of the appropriate exemption which for a married taxpayer filing
jointly is $40,000.00, for married taxpayers filing separately, $20,000.00, and for all others, $30,000.00". The result is then multiplied by the 20% rate. The taxpayer is permitted to take certain special itemized deductions to arrive at alternative minimum taxable income. These special itemized deductions are deductible only to the extent that they have not been utilized in determining adjusted gross income. The special itemized deductions are: (1) casualty and gambling losses, (2) medical expenses (only to the extent they exceed 10% of adjusted gross income), (3) charitable contributions, (4) the estate tax attributable to income in respect of a decedent, and (5) qualified interest". "Qualified interest" consists of qualified housing interest and qualified interest other than qualified housing interest. These items are deductible only to the extent of "qualified net investment income" for the year". Qualified housing interest is defined as being equal to interest paid or accrued on indebtedness incurred to acquire, construct or substantially rehabilitate any property which is a
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