Tax

AMT Calculator

Calculate your 2026 Alternative Minimum Tax with ISO exercises, SALT add-backs, and exemption phase-outs. Compare AMT vs regular tax.

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AMT Preference Items

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Disclaimer: This calculator provides estimates only and does not constitute tax advice. Consult a qualified tax professional. AMT calculations involve many nuances not captured in a simplified calculator.

About This Tool

The AMT Calculator helps you determine whether you may be subject to the Alternative Minimum Tax for 2026. The AMT was originally designed to prevent wealthy taxpayers from using deductions and credits to pay little or no federal income tax. It operates as a parallel tax system with its own set of rules for computing taxable income, its own exemption amounts, and its own tax rates.

To calculate AMT, you start with your regular taxable income and add back certain deductions and include certain income items that are excluded under the regular tax system. This produces your Alternative Minimum Taxable Income (AMTI). After subtracting the AMT exemption, the remaining amount is taxed at 26% (on the first $232,600) and 28% (on the excess). If this tentative minimum tax exceeds your regular tax, you owe the difference as AMT.

Who Is Most at Risk for AMT?

The most common triggers for AMT include exercising incentive stock options (ISOs), having large state and local tax deductions, earning significant tax-exempt interest from private activity bonds, and claiming accelerated depreciation. Tech employees who exercise ISOs are particularly vulnerable because the spread between the exercise price and fair market value is included in AMTI even though it is not taxed under the regular system until the stock is sold.

The AMT Exemption Phase-Out

The AMT exemption begins to phase out when AMTI exceeds certain thresholds. For 2026, the phase-out begins at $609,350 for single filers and $1,218,700 for married filing jointly. The exemption is reduced by 25 cents for every dollar of AMTI above the threshold. This means the exemption is completely eliminated when AMTI reaches approximately $961,750 (single) or $1,766,700 (married).

AMT Credits and Recovery

If you pay AMT due to timing differences (deferral items like ISO exercises), you may generate an AMT credit that can be used in future years when your regular tax exceeds your tentative minimum tax. This credit helps you recover AMT paid on items that will eventually be taxed under the regular system. The credit is claimed on Form 8801 and can be carried forward indefinitely.

Frequently Asked Questions

What is the Alternative Minimum Tax (AMT)?
The AMT is a parallel tax system designed to ensure high-income taxpayers pay a minimum amount of tax, even if they have significant deductions and credits. You calculate your tax under both the regular system and the AMT system, then pay whichever is higher. The AMT adds back certain deductions (like state and local taxes) and includes income items not taxed under the regular system (like ISO exercise spreads).
What are AMT preference items?
AMT preference items are adjustments that increase your Alternative Minimum Taxable Income (AMTI). The most common include: the spread on incentive stock option (ISO) exercises, state and local tax (SALT) deductions, certain tax-exempt interest from private activity bonds, accelerated depreciation adjustments, and some passive activity losses. These items are added back to your regular taxable income to compute AMTI.
How does exercising ISOs trigger AMT?
When you exercise incentive stock options (ISOs), the difference between the fair market value of the stock and the exercise price (the spread) is not taxed for regular income tax purposes but IS included in your AMTI. Large ISO exercises can push you into AMT territory. For example, exercising ISOs with a $200,000 spread could generate $52,000 or more in additional AMT. Careful planning around the timing and quantity of ISO exercises is essential.
What is the 2026 AMT exemption?
For 2026, the AMT exemption is $88,100 for single filers and $137,000 for married filing jointly. This exemption reduces your AMTI before the AMT rates are applied. However, the exemption phases out at higher income levels: it begins to decrease when AMTI exceeds $609,350 (single) or $1,218,700 (married), reducing by 25 cents for every dollar over the threshold until fully phased out.
Can I get a credit for AMT paid?
Yes, if you pay AMT due to timing differences (like ISO exercises or depreciation adjustments rather than permanent exclusions), you may be eligible for the AMT credit (Form 8801) in future years. The credit allows you to recover AMT paid when the timing difference reverses. For example, if you paid AMT because of an ISO exercise, you can claim the credit in the year you sell the stock and recognize the gain for regular tax purposes.

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