AMT Calculator 2026

What Is the Alternative Minimum Tax and Who Owes It in 2026?

The Alternative Minimum Tax (AMT) is a parallel federal income tax system designed to ensure that high-income taxpayers pay a minimum level of tax, even when using legal deductions and tax preference items. Established by Congress in 1969, the AMT recomputes your tax liability after adding back specific deductions and income items that are excluded under the regular tax system. If the resulting tentative minimum tax exceeds your regular income tax, you pay the difference as AMT. For 2026, the IRS (Form 6251) and OBBB provisions set new inflation-adjusted exemptions: $88,100 for Single filers, $137,000 for Married Filing Jointly, and $68,500 for Married Filing Separately. The phaseout begins at $609,350 for Single and $1,218,700 for MFJ, meaning very-high-income households see their exemptions gradually reduced.

2026 AMT Preference Items and How They Add to AMTI

Your AMT Income (AMTI) starts with your regular taxable income and then adds back specific preference items that reduce regular tax but are disallowed under AMT. Understanding each item helps you plan to minimize exposure:

• State and Local Tax (SALT) Add-Back: The SALT deduction (capped at $10,000 under TCJA for regular tax) is entirely disallowed under AMT. If you deducted $10,000 of SALT, the full $10,000 is added back to compute AMTI. This is the most common AMT trigger for upper-middle-income households.
• Private Activity Bond Interest: Interest from certain municipal bonds issued to finance private activities (e.g., airport bonds, housing bonds) is tax-exempt for regular income tax purposes but counted as a preference item under AMT. Check your 1099-INT box 9 or broker statement.
• ISO Exercise Bargain Element: When you exercise Incentive Stock Options (ISOs) but do not sell the shares in the same year, the spread between the fair market value and the exercise price is not taxed for regular purposes — but it is fully included in AMTI. This is a major AMT trigger for tech employees with large ISO grants.
• Accelerated Depreciation: The difference between MACRS depreciation taken for regular tax and straight-line depreciation for AMT purposes is added back. Businesses with significant depreciable assets may face AMT from this item.
• Home Equity Loan Interest: Interest on home equity debt not used to buy, build, or substantially improve your home is not deductible under AMT (though it was reinstated for regular tax under OBBB for qualifying uses). If you took this deduction on Schedule A, it must be added back.

According to irs.gov (Form 6251), these items collectively form AMTI, from which your exemption is subtracted to arrive at the AMT base. Based on IRS statistics, approximately 200,000–400,000 households pay AMT annually post-TCJA, primarily those with high ISO exercises or large SALT deductions in high-tax states. Sources: irs.gov (Form 6251), OBBB P.L. 119-21. Last updated: May 2026.

How the AMT Exemption Phaseout Works in 2026

The AMT exemption is not a flat amount for everyone — it phases out for higher-income taxpayers at a rate of $0.25 for every $1 of AMTI above the phaseout threshold. For 2026, the phaseout begins at $609,350 (Single) and $1,218,700 (MFJ). The exemption is fully phased out when AMTI reaches the threshold plus four times the exemption amount.

For example, a Single filer with $88,100 in exemption sees it begin to phase out at $609,350 AMTI. The exemption is fully eliminated when AMTI exceeds $609,350 + (4 × $88,100) = $961,750. Between those income levels, the effective marginal AMT rate is not just 26%/28% — it rises to 32.5%–35% due to the phaseout clawback. This calculator accurately computes the phaseout reduction and shows you the exact reduced exemption amount so there are no surprises.

AMT Rates and When You Enter the 28% Bracket

The AMT applies two tax rates to the AMT base (AMTI minus exemption). For 2026, the rate structure is: 26% on the first $248,300 of AMT base (or $124,150 for Married Filing Separately), and 28% on all amounts above that threshold. This is a significant difference from the regular tax system's graduated brackets — the AMT uses only two rates with a much higher floor rate.

Long-term capital gains and qualified dividends receive preferential treatment even under the AMT: they are generally subject to the same 0%/15%/20% rates as under the regular tax (not the 26%/28% AMT rates). This calculator applies the standard 26%/28% rate structure to the full AMT base as reported on Form 6251, which is appropriate for most taxpayers with ordinary income subject to AMT. If you have significant capital gains, the qualified dividends/capital gains worksheet may reduce your actual AMT — consult Form 6251 instructions or a tax professional for that advanced computation.