AMT Bomb Still Ticks Despite 1-Year Relief; Millions in middle class may soon face the tax despite short-term fix.(A)

Byline: PAUL KATZEFF

The $146 billion tax package that Congress sent to President Bush extends several popular middle-class tax breaks -- the $1,000 child tax credit, a larger 10% tax bracket and marriage penalty relief.

Less widely noticed, the bill also extends modest relief from the dreaded alternative minimum tax.

The AMT began as a way to prevent high income earners from escaping tax due to legal loopholes. But inflation and recent cuts to regular tax rates are inadvertently pushing more and more middle-class taxpayers into the AMT.

Still, the AMT safe haven is limited, and lasts only one year. The exemption for married couples is being retained, but cut from $58,000 to $45,000. The $40,250 exemption …