On April 17, Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Charles Grassley (R-Iowa) introduced a tax package (S. 2886) that would provide relief from the alternative minimum tax (AMT) and extend dozens of expiring individual and business provisions through the end of 2009.

Last year, Congress did not put an AMT patch in place until December--a relatively late date given the pending tax season. S. 2886 calls on Congress to act sooner to avoid the confusion surrounding late year's AMT patch. The patch passed last year increased the exemptions for an individual to $44,350 for married couples filing jointly to $66,250, and allowed for personal credits against the AMT.

The current Baucus-Grassley proposal increases the exemption amounts to $46,200 and $69,950, respectively for 2008. The plan will also allow the personal credit against the AMT in order to keep families not currently required to pay the AMT from being snared by the AMT in the future.

S. 2886 also contains a two-year extension of provisions that expired at the end of last year including making the research and development (R&D) credit retroactive to the beginning of 2008 and extending it to the end of 2009. The legislation would also repeal the alternative incremental research credit this year and increase the simplified credit to 14 percent this year and 16 percent next year. Earlier this month, 85 lawmakers from both sides of the aisle sent a letter to House leadership urging quick passage of a similar R&D tax extender bill that was introduced last May. That bill, despite 151 cosponsors, is still pending in the House Ways and Means Committee.

Additional provisions include the qualified tuition deduction to give families relief from high tuition costs, a teacher expense deduction, the state and local sales tax deduction for those states without an income tax and the extension of energy tax credits for wind and solar power, efficient buildings and appliances, and clean renewable energy bonds.

The Baucus-Grassley proposal contains no offsets, which may face challenges since House Democrats have pressed for compliance with the pay-go budgeting rules they have championed throughout the 110th Congress. However, Baucus typically does not release offsets until just before a markup, which could occur on this extenders package within a few weeks.