Alternative Minimum Tax (AMT) in 2026
The AMT is a parallel federal tax that ensures high-income filers pay at least a minimum, by disallowing many deductions. Here are the 2026 exemption amounts and phase-outs.
Updated 2026-08-11 · figures retrieved 2026-08-11 from IRS Rev. Proc. 2025-32.
Direct answer
In 2026 the federal AMT exemption is $90,100 single / $140,200 joint (IRS Rev. Proc. 2025-32). It phases out starting at $500,000 (single) / $1,000,000 (joint), at 25¢ per dollar of AMT income. You owe AMT only when it exceeds your regular tax — common triggers are ISO exercises and large SALT deductions. Source: IRS Rev. Proc. 2025-32, retrieved 2026-08-11.
2026 AMT exemption & phase-out
The exemption is reduced by 25% of AMT income above the phase-out start, so it is fully eliminated at roughly four times the threshold. The 28% AMT rate applies above the exemption; a 26% rate applies to the first AMT bracket.
How the AMT is computed
The AMT starts from regular taxable income and adds back certain “preferences” to produce alternative minimum taxable income (AMTI). The steps:
- Take regular taxable income, then add back disallowed items (ISO bargain element, most state & local tax, miscellaneous itemized deductions, private-activity municipal-bond interest).
- Subtract the exemption (above), reduced if AMTI is above the phase-out start.
- Apply the AMT rates: 26% on the first portion of AMTI above the exemption, 28% above that.
- Compare the AMT to your regular tax. You owe the greater of the two — the AMT only bites when it exceeds regular tax.
The exemption is reduced by 25% of AMTI above the phase-out start, so it is fully eliminated at roughly four times the threshold ($4,000,000 for joint filers in 2026).
Worked example — joint filers, 2026
A married-joint couple with AMTI of $1,200,000: the exemption starts at $140,200 and is reduced by 25% of the excess over $1,000,000 — i.e. 25% × $200,000 = $50,000. The allowable exemption falls to $90,200, leaving $1,109,800 taxed at the AMT rates. (Illustrative; actual liability also depends on the regular-tax comparison and any AMT credit carried forward.)
Where the SALT cap and ISOs matter most
Two facts drive most modern AMT bills. First, the state & local tax deduction is capped at $40,400 (married joint) for 2026 under OBBBA, so large-SALT filers can no longer shelter that income under the regular tax — pushing more of them into AMT territory. Second, exercising incentive stock options (ISOs) creates a “bargain element” (the spread between strike and fair-market value) that is AMT income even though you owe no regular tax until you sell. A concentrated ISO exercise is the classic AMT trap for early-stage employees.
Sources & methodology
- IRS — Tax inflation adjustments for tax year 2026 (Rev. Proc. 2025-32) — Internal Revenue Service
- IRS Pub. 15 (Circular E), Employer’s Tax Guide 2026 — Social Security wage base $184,500 — Internal Revenue Service
- IRS Pub. 15-T (2026), Federal Income Tax Withholding Methods — Internal Revenue Service
- IRS Form 1041-ES (2026) — capital gains rate thresholds — Internal Revenue Service
- OBBBA (One Big Beautiful Bill Act), Pub. L. 119-21 — SALT, estate, QBI, QSBS, senior deduction — Internal Revenue Service
AMT 2026 FAQ
What is the AMT exemption in 2026?
The federal AMT exemption is $90,100 for single filers and $140,200 for married couples filing jointly in 2026, indexed for inflation (IRS Rev. Proc. 2025-32).
When does the AMT exemption phase out?
The exemption begins to phase out at $500,000 of AMI for single filers and $1,000,000 for joint filers. It is reduced by 25 cents for every dollar of AMT income above the threshold, so it is fully gone at roughly 4x the threshold.
What triggers the AMT?
The AMT adds back certain preferences disallowed under the regular tax: incentive stock option (ISO) bargain element, large state and local tax deductions (now capped at $40,400), miscellaneous itemized deductions, and private-activity municipal-bond interest. You owe the AMT only if it exceeds your regular tax.
Is the AMT still relevant after the 2017 TCJA changes?
Yes, but far fewer people hit it. The TCJA roughly doubled the exemption and raised the phase-out thresholds through 2025; OBBBA made those levels permanent, so the AMT mainly affects higher-income filers with large ISO exercises or very high SALT deductions.
Not tax, legal, or financial advice
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