New Yorkers owed an extra $2.6 billion to the federal government last year as a result of the Alternative Minimum Tax, or AMT, as documented in a new Empire Center report available here.

Other findings:

• The AMT hit 332,000 New York households in 2004, double the number of just four years earlier, as the special tax meant originally intended for the wealthiest American continued to spread to more middle-class families.
• The AMT disallows itemized deductions for state and local taxes, so residents of the heavily taxed Empire State are right in the crosshairs. In fact, with just 7 percent of all tax filers, New York in 2004 accounted for 12 percent of all AMT filers and 15 percent of AMT liability.
• Under current law, it’ll get worse. The number of New Yorkers affecte dby the AMT will jump to over 1.5 million in 2006, including virtually all middle-class, homeowning (and thus property tax-paying) families with children.

There’s been skepticism in some quarters that President Bush really means to push federal tax reform after he receives a report from an advisory panel now studying the issue, due to wrap up in the summer. But the looming AMT problem makes some form of sweeping, fundamental income tax overhaul boith necessary and inevitable, sooner or later.