The American Taxpayer Relief Act of 2012 has the following provisions:
- The budget sequestration would be delayed by two months, to give time for further negotiations on deficit reduction. The $24 billion cost would be offset by tax increases, as well as a provision allowing 401(k) accounts to be rolled over into Roth IRA plans, requiring taxes to be paid on the assets.
- Marginal income and capital gains tax rates would increase relative to their 2012 levels for those with annual income over $400,000 for individuals and $450,000 for couples, but the rates below these levels would remain at their 2012 levels. The top income rate would increase from 35% to 39.6%, and the capital gains rate would increase from 15% to 20%.
- A phase-out of tax deductions and credits for incomes over $250,000 for individuals and $300,000 for couples would be reinstated. Limits on deductions had existed before the Bush tax cuts, and had disappeared in 2010.
- Estate taxes would be set at 40% of the value above $5,000,000, an increase from the 2012 rate of 35% of the value over $5,120,000.
- Changes would be made to the alternative minimum tax to avoid its application to middle-class families.
- The two-year old cut to payroll taxes would expire.