The Alternative Minimum Tax is a parallel tax system meant to make sure high-income filers with large deductions still pay something. You compute your regular tax and your AMT, then pay whichever is higher. The 2025 law changed AMT parameters, so 2026 looks different from a few years ago.
2026 AMT exemption amounts
- Single: $90,100
- Married filing jointly / surviving spouse: $140,200
- Married filing separately: $70,100
The exemption begins to phase out at:
- $500,000 for single filers
- $1,000,000 for married filing jointly
- $500,000 for married filing separately
The phase-out rate is 25 cents of exemption lost per dollar of AMTI above the threshold. OBBBA also returned the phase-out to the faster 50% structure, so more upper-income filers see AMT exposure in 2026 than in 2025.
The AMT rates
AMT itself is taxed at two rates: 26% on the first portion of alternative minimum taxable income, and 28% above a breakpoint (about $244,500 for 2026; half that for married filing separately). Confirm the exact 2026 breakpoint in Rev. Proc. 2025-32.
What triggers AMT
Common AMT preferences and adjustments:
- Large state and local tax deductions (now more relevant with the higher SALT cap)
- Incentive stock option (ISO) exercises
- High miscellaneous itemized deductions or certain depreciation
- Large capital gains pushing income up
Numbers: the phase-out
A single filer with $600,000 of AMTI in 2026:
- Exemption starts at $90,100
- Phase-out: 25% x ($600,000 - $500,000) = $25,000 reduction
- Usable exemption: $65,100
- AMT applies to AMTI minus the exemption
Because the exemption is large and phase-out gradual, most middle-income households never hit AMT. It concentrates among high earners with big deductions or ISO exercise gains.
Disclaimer: This article is general educational information, not tax, legal, or investment advice. Dollar amounts come from the 2026 sources listed at the end of this article and may change. Before you act, talk to a licensed CPA, EA, or tax attorney about your own situation.