California AMT 2026 State Alternative Minimum Tax Calculator
California AMT 2026 imposes a 7% state-level Alternative Minimum Tax with a $93,719 single / $124,959 joint exemption phased out at higher AMTI, computed on Schedule P (540). Federal AMTI plus CA-specific add-backs flows into the state calculation per FTB rules.
| Federal AMTI | — |
| + CA preferences & ISO | — |
| − CA subtractions | — |
| = California AMTI | — |
| CA AMT exemption (after phase-out) | — |
| CA AMTI after exemption | — |
| Tentative CA AMT @ 7% | — |
| Less CA regular tax | — |
| California AMT owed (Sch P) | — |
California AMT 2026 is the state-level Alternative Minimum Tax imposed at 7% on Alternative Minimum Taxable Income with a $93,719 single / $124,959 joint exemption (phased out at AMTI of $312,397 single / $416,529 joint). It is computed on Schedule P (540) for residents and is separate from federal AMT — California still imposes it even though TCJA largely neutralized federal AMT.
Why California AMT Still Matters in 2026
Federal AMT became rare after TCJA raised exemptions and capped state tax deductions. But California did not conform — the FTB kept its own 7% AMT with much lower exemptions, so high-income Californians who escape federal AMT still owe state AMT. The most common triggers are ISO bargain element (incentive stock options exercised and held past year-end), depreciation timing differences, and passive activity loss limitations. Silicon Valley engineers exercising ISOs are the textbook CA AMT victims.
Schedule P (540) Computation Flow
Start with federal AMTI (Form 6251 line 4), then make CA-specific adjustments: add CA depreciation differences, add back ISO bargain element if CA-sourced, subtract items that are federal preferences but not CA preferences (e.g., post-1986 depreciation differences California chose not to conform). Apply the $93,719/$124,959 exemption with 25% phase-out, then 7% on the excess. Subtract regular CA tax (Form 540 line 31); positive remainder is California AMT entered on Form 540 line 61.
Planning Around California AMT
(1) Time ISO exercises — if you exercise and hold, the bargain element is a CA AMT preference; consider same-year sales (disqualifying disposition) to avoid AMT exposure. (2) CA AMT credit carryforward — like federal, AMT paid on deferral items (depreciation, ISO) generates a credit recoverable in future years on FTB Form 3510. (3) Move state residency carefully — partial-year residents prorate AMT by CA-source income. (4) Tax-free interest — California also has its own private activity bond add-back rules; double-check before investing.
Last updated May 2026. Sources: California FTB Schedule P (540) Instructions, FTB Form 3510 (AMT Credit).