What is the Alternative Minimum Tax?
The Alternative Minimum Tax (AMT) is a parallel federal tax system that puts a floor under how far certain deductions and preference items can shrink your bill. You effectively figure your tax twice — the ordinary way, and again under the AMT rules that disallow some deductions — and pay whichever is higher. This calculator takes your Alternative Minimum Taxable Income (AMTI) and your regular tax liability and returns your 2026 AMT exemption after phaseout, your Tentative Minimum Tax, and any AMT you owe on top of your regular tax.
It mirrors the core structure of IRS Form 6251 for tax year 2026, using the exemption, phaseout and 26%/28% bracket figures from Revenue Procedure 2025-32 (with the OBBBA §70107 changes made permanent). It does not derive AMTI from raw income — you supply AMTI and a comparable regular-tax figure, which you can estimate first with the federal income tax calculator.
How the AMT is calculated
The five steps, in order, are:
- Exemption after phaseout — start from your filing-status exemption and remove 50 cents for every dollar of AMTI above the phaseout threshold, floored at zero.
- AMT taxable base — subtract that exemption from your AMTI (Form 6251 line 6).
- Tentative Minimum Tax (TMT) — tax the base at 26% up to the breakpoint and 28% above it (line 7).
- AMT owed — the amount by which the TMT exceeds your regular tax, never below zero (line 11).
- Total tax due — the higher of your regular tax and the TMT.
exemption = max(0, baseExemption − 0.50 × max(0, AMTI − phaseoutStart)); base = max(0, AMTI − exemption); TMT = base ≤ breakpoint ? 0.26 × base : 0.28 × base − 0.02 × breakpoint; AMT = max(0, TMT − regularTax); totalTaxDue = max(regularTax, TMT)
2026 exemptions, phaseouts and brackets
These are the tax-year-2026 figures the calculator uses. Head of household uses the same amounts as single filers. Because the exemption phases out at 50 cents on the dollar, a single filer's exemption reaches zero once AMTI hits $680,200.
| Filing status | Exemption | Phaseout starts | 26%/28% breakpoint |
|---|---|---|---|
| Single | $90,100.00 | $500,000.00 | $244,500.00 |
| Married filing jointly | $140,200.00 | $1,000,000.00 | $244,500.00 |
| Married filing separately | $70,100.00 | $500,000.00 | $122,250.00 |
| Head of household | $90,100.00 | $500,000.00 | $244,500.00 |
Worked example
A single filer with $350,000 of AMTI and $60,000 of regular tax, computed by the same engine that powers the calculator above:
| Single filer · AMTI $350,000 · regular tax $60,000 | Amount |
|---|---|
| Alternative Minimum Taxable Income (AMTI) | $350,000.00 |
| Less: AMT exemption (no phaseout below $500,000) | − $90,100.00 |
| AMT taxable base (Form 6251 line 6) | $259,900.00 |
| Tentative Minimum Tax at 26% / 28% (line 7) | $67,882.00 |
| Less: regular tax liability | − $60,000.00 |
| Alternative Minimum Tax owed (line 11) | $7,882.00 |
| Total federal tax due (regular + AMT) | $67,882.00 |
The AMT base of $259,900 sits above the $244,500 breakpoint, so the 28% bracket applies: 0.28 × 259,900 − 0.02 × 244,500 = $67,882 of Tentative Minimum Tax. Because that exceeds the $60,000 regular tax, the taxpayer owes $7,882 of AMT and $67,882 in total.
What commonly triggers AMT
The classic AMT profile is a high earner with large add-back items. The most common triggers are exercising incentive stock options and holding the shares (the bargain element is an AMT preference item), a big state and local tax (SALT) deduction, and significant private-activity-bond interest or accelerated depreciation. If you are modelling a stock sale or option exercise, pair this with the capital gains tax calculator and, for freelancers weighing an S-corp or estimated payments, the self-employment tax calculator.
Assumptions and limitations
- Constants are for tax year 2026 (Rev. Proc. 2025-32, OBBBA §70107) and must be re-validated when the IRS publishes the 2027 inflation adjustments.
- Simplified model: it taxes the whole AMT base at the ordinary 26%/28% rates. Form 6251 Part III instead keeps net long-term capital gains and qualified dividends at their lower rates, so a taxpayer with large gains will see a lower real TMT than shown here.
- It does not compute the AMT Foreign Tax Credit, the line-9 regular-tax adjustments, the special MFS high-AMTI exemption add-back, or the Form 8801 minimum tax credit you may be able to carry forward from AMT paid in a prior year.
- You supply AMTI directly — this tool does not enumerate every preference/adjustment item (ISO bargain element, private-activity-bond interest, depreciation, depletion, etc.).
- US federal only — no state AMT (such as California's) is included. This is an estimate, not tax advice.
Frequently asked questions
What is the Alternative Minimum Tax (AMT) and who has to pay it?+
The AMT is a parallel federal tax system that limits how much certain deductions and preference items can reduce your tax bill. You calculate your tax liability two ways — the regular way and the AMT way — and pay whichever is higher. It mainly affects taxpayers with large add-back items such as high state and local taxes, incentive stock option exercises, or significant itemized deductions relative to income.
How is AMTI different from my regular taxable income?+
Alternative Minimum Taxable Income (AMTI) starts from your regular taxable income and adds back certain deductions and preference items the AMT doesn't allow — most commonly the standard deduction, state and local tax (SALT) deductions, and the 'bargain element' when you exercise incentive stock options. AMTI is almost always higher than your regular taxable income because of these add-backs.
What is the AMT exemption for 2026?+
For tax year 2026, the AMT exemption is $90,100 for single and head-of-household filers, $140,200 for married filing jointly, and $70,100 for married filing separately, per IRS Revenue Procedure 2025-32. These amounts are subtracted from your AMTI (after any phaseout) before the 26%/28% AMT rates are applied.
How does the AMT exemption phaseout work?+
Once your AMTI exceeds the phaseout threshold ($500,000 for single/HoH/MFS, $1,000,000 for married filing jointly in 2026), your exemption shrinks by 50 cents for every dollar of AMTI above that threshold. Under the accelerated 50% phaseout rate that began in 2026, the exemption reaches zero once AMTI is about double the exemption amount above the threshold — for example, a single filer's exemption is fully phased out at $680,200 of AMTI.
What are the AMT tax rates?+
The AMT applies just two rates to your AMT base (AMTI minus the exemption): 26% on the first $244,500 in 2026 ($122,250 if married filing separately), and 28% on any amount above that. Unlike the regular seven-bracket system, AMT has only this two-tier structure.
How do I know if I owe AMT?+
You owe AMT only when your Tentative Minimum Tax (TMT) — the tax computed on your AMT base at 26%/28% — exceeds your regular tax liability. The AMT you actually pay is that excess, added on top of your regular tax. If your regular tax is already higher than the TMT, you owe no additional AMT.
What triggers AMT for most taxpayers?+
Common triggers include exercising incentive stock options and holding the shares (the bargain element is an AMT preference item), claiming large state and local tax deductions, having a large family with many dependents under the old rules, or having significant private-activity-bond interest or accelerated depreciation. High income combined with these add-backs is the classic AMT profile.
Does this calculator account for capital gains taxed at AMT?+
No — this calculator applies the standard 26%/28% AMT rates to your entire AMT base as a simplified estimate. In the real Form 6251 Part III worksheet, net long-term capital gains and qualified dividends inside your AMT base keep their preferential 0/15/20% rates, so a taxpayer with substantial capital gains will typically see a lower actual TMT than this tool shows.
Is head of household treated differently for AMT?+
No — for AMT purposes, head of household filers use the same exemption amount, phaseout threshold, and 26%/28% breakpoint as single filers. The IRS does not give head-of-household status a separate, more generous AMT schedule.
Can I avoid or reduce the AMT?+
Some common strategies include timing incentive stock option exercises carefully (e.g. spreading exercises across years or considering a disqualifying disposition), being mindful of how much SALT deduction you're adding back, and running a side-by-side regular-tax vs AMT projection before large one-time transactions. There's no guaranteed way to avoid AMT for every situation — a tax professional can model your specific numbers.
Is state AMT included in this calculator?+
No. This calculator estimates federal AMT only. A handful of states (notably California) impose their own separate alternative minimum tax with different exemption amounts and rates, which is not modeled here.
Where do these numbers come from on my actual tax return?+
This calculator mirrors the core structure of IRS Form 6251: your AMTI (line-level input), exemption after phaseout (Part II), AMT base (line 6), Tentative Minimum Tax (line 7), and AMT owed (line 11, the excess of TMT over your regular tax). It does not replace filing Form 6251 — use it to estimate whether you're likely to owe AMT before you file.
Can I get back AMT I paid in a prior year?+
Sometimes, through the minimum tax credit on IRS Form 8801 — but only for the portion of your AMT caused by 'deferral' items, which reverse in a later year (the classic example is the ISO bargain element: once you sell the shares, that income shows up again on your regular return, and the credit offsets the double taxation). AMT driven by 'exclusion' items — the standard deduction, SALT, and similar add-backs that never reverse — earns no credit, because there's no future year where that income comes back. Any unused credit carries forward to future years until you use it.
Disclaimer
Sources
- IRS Instructions for Form 6251 — Alternative Minimum Tax
- IRS — About Form 6251
- KPMG — 2026 Individual Inflation Adjustments (Rev. Proc. 2025-32)
- Current Federal Tax Developments — Rev. Proc. 2025-32 Analysis
- Tax Foundation — 2026 Tax Brackets
- IRS — About Form 8801 (Credit for Prior Year Minimum Tax)
Formula and data last reviewed by the TheCalculatorHive team on 11 July 2026. Figures are for general information, not professional advice.
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