Federal Alternative Minimum Tax (AMT) Calculator

How this calculator works

The Alternative Minimum Tax under IRC §§ 55-59 is a parallel federal income tax. You compute regular tax the normal way. You then compute a tentative AMT — starting from regular taxable income, adding back AMT preferences, subtracting an exemption, and applying a two-bracket rate schedule. You pay the greater of the two figures under § 55(a). The dollar amount by which tentative AMT exceeds regular tax is added to your federal bill on Form 1040 line 17. The AMT does not double-tax; it floors.

Originally enacted in 1969 to ensure that a handful of high-income taxpayers — the famous 155 individuals with adjusted gross income above $200,000 who paid no federal income tax in 1966 — could not zero out their bill by stacking preferences, the AMT has evolved over six decades into a parallel-tax framework that, post-TCJA, hits roughly 0.1% of individual returns per year. Almost every remaining AMT filer is in one of four buckets: large incentive stock option exercises, unusual depreciation adjustments, private activity bond interest, or AMTI approaching the phase-out range where the marginal rate compounds.

What changed after TCJA — why almost nobody pays AMT anymore

The Tax Cuts and Jobs Act of 2017 made three changes that, together, reduced AMT returns from roughly 5 million per year to roughly 200,000 per year:

1. Higher exemption amounts. The exemption jumped from approximately $54,300 single / $84,500 MFJ in 2017 to approximately $84,500 / $131,500 in 2018, and has indexed up since. For tax year 2026 the inflation-adjusted figures are $90,000 single or head of household, $140,000 MFJ or qualifying surviving spouse, and $70,000 MFS (one-half of MFJ).

2. Higher phase-out thresholds. The exemption phase-out under § 55(d)(3) used to start at roughly $120,700 single / $160,900 MFJ — meaning the exemption began eroding at income levels that captured most upper-middle-class households. TCJA raised the thresholds to roughly $500,000 / $1,000,000 (indexed up to $639,000 / $1,278,000 for 2026). At those levels, the phase-out only matters for genuinely high-income filers.

3. Suspended preferences. The largest pre-TCJA AMT add-backs for upper-middle-class filers — miscellaneous itemized deductions and the personal exemption — were both suspended by TCJA through 2025. With no deduction taken on the regular return, there is nothing to add back on Form 6251. The new $10,000 SALT cap under IRC § 164(b)(6) also neutralized the SALT preference for most filers; if your SALT deduction is capped at $10,000, the AMT add-back is also capped at $10,000, and that small a preference rarely pushes a household into AMT.

The pre-TCJA AMT was a "millionaire's tax" that crept into upper-middle-class territory. The post-TCJA AMT is back to its original narrow scope — and is dominated by one fact pattern: tech employees exercising incentive stock options.

2026 figures, by filing status

| Filing status | Exemption | Phase-out start | Bracket threshold | | -------------------------------------------- | ------------ | --------------- | ----------------- | | MFJ / qualifying surviving spouse | $140,000 | $1,278,000 | $240,000 | | Single | $90,000 | $639,000 | $240,000 | | Head of household | $90,000 | $639,000 | $240,000 | | Married filing separately | $70,000 | $639,000 | $120,000 |

The rate schedule under § 55(b)(1) is flat two-bracket: 26% on taxable AMTI up to the bracket threshold, 28% on the excess. The bracket threshold is the same for all filing statuses other than MFS, which gets one-half. The 26%/28% rate is applied to a base (taxable AMTI) that is larger than regular taxable income — preferences have been added back — so the lower-looking rate schedule does not mean a lower tax.

The phase-out math, and why it compounds

Under § 55(d)(3), the statutory exemption is reduced by 25 cents for each dollar of AMTI above the phase-out threshold. The exemption fully phases out at AMTI equal to (phase-out start + 4 × exemption). For an MFJ filer with a $140,000 exemption and a $1,278,000 phase-out start, the exemption hits zero at AMTI of $1,838,000.

Between the phase-out start and the full-phase-out point, the effective marginal AMT rate is 35%. Every additional dollar of AMTI is taxed at the 28% upper-bracket rate AND eliminates 25¢ of exemption — and that 25¢ of exemption was itself sheltering 28¢ of tax. So one additional dollar of AMTI costs the taxpayer 28¢ of tax on the marginal dollar plus 7¢ of tax on the exemption that just disappeared = 35¢ total. Once AMTI exceeds the full-phase-out point, the marginal AMT rate drops back to 28%.

What gets added back to compute AMTI

IRC §§ 56-57 list the AMT preferences and adjustments. The ones this calculator surfaces:

• State and local income tax deduction (§ 56(b)(1)(A)(ii)) — added back in full. Post-TCJA, the $10,000 SALT cap caps the practical add-back.
• Real estate and personal property tax deduction — component of the SALT cap; also added back.
• Incentive stock option bargain element (§ 56(b)(3)) — FMV at exercise minus strike price, multiplied by shares exercised. The dominant post-TCJA AMT trigger.
• Depreciation adjustment (§ 56(a)(1)) — regular MACRS minus AMT ADS-style recovery. Positive in early years of an asset's life, reversing later.
• Private activity bond interest (§ 57(a)(5)) — tax-exempt for regular tax under § 103, but added back for AMT. Most municipal bond fund prospectuses identify the private-activity portion.

The full Form 6251 line list includes additional preferences (NOL differences, percentage depletion, basis differences, certain credit interactions) that this calculator does not model — for unusual fact patterns, consult Form 6251 and your CPA.

Worked example — MFJ baseline, no AMT

A married couple files jointly with $200,000 AGI in 2026. They itemize, taking $25,000 in state income tax (capped at $10,000 under the SALT cap) and $5,000 in real estate tax. Their regular taxable income is approximately $175,000 after the standard or itemized deduction posture. Their regular federal tax on $175,000 MFJ is approximately $30,000.

• AMTI: $175,000 + $10,000 SALT cap + $0 real estate (within cap) = $185,000
• Phase-out: $185,000 is far below the $1,278,000 MFJ threshold; no phase-out applies
• Applicable exemption: $140,000 MFJ statutory exemption, full
• Taxable AMTI: $185,000 − $140,000 = $45,000
• Tentative AMT: $45,000 × 26% = $11,700
• Regular tax: $30,000
• AMT owed: max(0, $11,700 − $30,000) = $0

AMT does not apply. Regular tax controls because it already exceeds tentative AMT. This is the typical post-TCJA result.

Worked example — single ISO exercise, large AMT bill

A single tech employee earns $300,000 in W-2 wages in 2026 and exercises 5,000 incentive stock options at a $10 strike price when the company stock trades at $90. The bargain element is $80 × 5,000 = $400,000. She holds the stock to preserve long-term capital gains treatment for regular tax under § 422.

Her regular taxable income on $300,000 of wages (less standard deduction) is approximately $285,000. Her regular federal tax is approximately $60,000 (single, 2026 brackets). The ISO exercise produces no regular-tax income.

• AMTI: $285,000 regular taxable income + $400,000 ISO bargain element = $685,000
• Phase-out: $685,000 − $639,000 = $46,000 excess × 25% = $11,500 exemption reduction
• Applicable exemption: $90,000 − $11,500 = $78,500
• Taxable AMTI: $685,000 − $78,500 = $606,500
• Tentative AMT: ($240,000 × 26%) + ($366,500 × 28%) = $62,400 + $102,620 = $165,020
• Regular tax: $60,000
• AMT owed: max(0, $165,020 − $60,000) = $105,020

AMT applies. The $105,020 excess is added to her federal bill on Form 1040 line 17. The cash is due now, in the exercise year, even though she has not sold the stock. This is the post-TCJA AMT in its dominant modern form — an ISO-exercise tax on tech employees. The AMT she pays here generates an IRC § 53 minimum-tax-credit carryforward that she can use to offset regular tax in a future year when she sells the stock and regular-tax capital gain income exceeds tentative AMT in that sale year. The credit is recoverable, but the cash-flow timing is brutal.

Worked example — MFJ at $1.5M, full exemption phase-out

A married couple files jointly with $1,500,000 of regular taxable income and $100,000 of SALT deduction (capped at $10,000 post-TCJA) and $50,000 of depreciation adjustment from a portfolio of rental real estate. Their regular federal tax is approximately $500,000.

• AMTI: $1,500,000 + $10,000 SALT cap + $50,000 depreciation = $1,560,000
• Phase-out: $1,560,000 − $1,278,000 = $282,000 excess × 25% = $70,500 — but capped at the $140,000 exemption itself
• Applicable exemption: $140,000 − $70,500 = $69,500 (partial phase-out)
• Taxable AMTI: $1,560,000 − $69,500 = $1,490,500
• Tentative AMT: ($240,000 × 26%) + ($1,250,500 × 28%) = $62,400 + $350,140 = $412,540
• Regular tax: $500,000
• AMT owed: max(0, $412,540 − $500,000) = $0

AMT does not apply, even at $1.5M of income, because the regular tax bracket schedule already produced $500,000 of regular tax — more than the tentative AMT of $412,540. Counterintuitively, the very high regular brackets (32%/35%/37% post-TCJA) work AGAINST AMT triggering for filers with mostly ordinary wage income. AMT triggers when regular tax is anomalously low relative to AMTI — which is exactly the ISO scenario, where a $400,000 economic gain produces $0 regular tax.

TCJA sunset — the AMT exposure cliff

Under current law as of 2026, the TCJA exemption increases and phase-out increases are scheduled to expire after December 31, 2025. If Congress does not extend them, the exemption would revert to pre-TCJA levels (roughly $55,000 MFJ and $36,000 single in 2018 dollars, somewhat higher after a decade of inflation indexing) and the phase-out threshold would revert to roughly $160,000 MFJ and $120,000 single. The 2026 figures in this calculator assume continued post-TCJA treatment; if a sunset occurs without extension, roughly 4-5 million returns would be re-exposed to AMT.

The taxpayers most affected by a sunset would be upper-middle-class households in high-tax states with significant SALT (if the SALT cap also sunsets), mortgage interest, and personal exemptions for large families — the classic pre-TCJA AMT profile. The status of the SALT cap, the personal exemption, the misc-itemized deduction suspension, and the AMT exemption are all bundled in the TCJA-extension legislative debate; outcomes will not be known until late 2025 or 2026 legislation.

If you are running this calculator in late 2025 or early 2026 and the legislative posture has shifted, check the lastReviewed stamp at the bottom of this page — we update the constants when the underlying rule changes.

The IRC § 53 AMT credit — partially recoverable

Not all AMT is permanent. IRC § 53 creates a minimum-tax-credit carryforward for the portion of prior-year AMT driven by TIMING preferences. The largest timing preference is the ISO bargain element under § 56(b)(3): regular tax and AMT recognize the same economic event in different years (AMT at exercise; regular tax at sale). When the stock is later sold, regular-tax capital gain income produces regular tax that exceeds tentative AMT in the sale year, and the prior-year § 53 credit offsets that excess dollar-for-dollar, recovering the AMT cash.

AMT driven by PERMANENT preferences — the SALT add-back, real estate tax add-back, private activity bond interest — is generally NOT credit-recoverable. Once paid, it stays paid. The depreciation adjustment is a timing preference (regular and AMT depreciation eventually true up over the asset's life) and the resulting AMT is partially credit-recoverable.

This calculator does not compute the § 53 credit carryforward. Multi-year credit tracking requires the prior-year exercise-and-disposition history for each lot of ISO stock and a CPA's review of timing vs. permanent preference categorization.

Common errors

• Wrong starting income. AMTI starts from regular taxable income (Form 1040 line 15), not AGI, not total income, not MAGI. Pulling the wrong number from Form 1040 is the most common Form 6251 input error.

• Forgetting the SALT cap is also an AMT cap. Under post-TCJA law, if your SALT deduction was capped at $10,000 on Schedule A, the AMT add-back is also $10,000 — not the gross state tax you paid. Filers who copy gross state income tax into the AMT preference line overstate AMTI.

• Confusing ISO with NSO. Non-qualified stock options (NSOs) generate ordinary regular-tax income at exercise equal to the bargain element. They are NOT an AMT preference, because the income is already in regular taxable income. Only Incentive Stock Options under § 422 produce the AMT preference. RSUs are not stock options at all — they are ordinary wage income at vest, neither ISO nor NSO.

• Disqualifying ISO disposition. If you sell ISO stock in the same year as exercise (a "disqualifying disposition" — failing the § 422(a)(1) holding period), the bargain element is recharacterized as ordinary regular-tax income on the regular return AND removed from the AMT preference list. The AMT exposure for that exercise generally disappears, replaced by regular ordinary-income tax. Same-year exercise-and-sell is a common AMT escape strategy when the cash from the sale will not be available to fund a hold-and-pay-AMT posture.

• Ignoring depreciation in early real-estate years. Aggressive bonus depreciation under § 168(k) on a real-estate portfolio creates a positive AMT adjustment in early years that can push a filer into AMT even with modest income. The adjustment reverses in later years but the cash flow in the early years is real.

How this page is maintained

The IRC §§ 55-59 AMT framework is statutorily stable, but the dollar amounts (exemption, phase-out, bracket threshold) inflation-adjust annually under § 55(d)(2). We refresh the constants in early calendar Q1 each year against the IRS Rev. Proc. annual inflation-adjustment release. The TCJA-sunset status is monitored continuously through late 2025 and 2026 legislative cycles; if the sunset occurs, the next ADR will revise the exemption and phase-out constants and the worked examples below.

Last reviewed: 2026-05-16 against IRC §§ 55-59; IRC § 55(a), (b)(1), (d)(1), (d)(2), (d)(3); IRC § 56; IRC § 57; IRC § 53; IRS Form 6251 + instructions; Rev. Proc. annual inflation adjustments.