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Alternative Minimum Tax Calculator

✦ Finance & Money

Use this free AMT calculator to see if you owe alternative minimum tax in 2026 from wages, ISO spread and deductions, worked through Form 6251. The alternative minimum tax calculator also shows how much ISO spread you can exercise AMT-free.

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The formula

Form 6251: AMTI, the exemption phase-out and the 26 % / 28 % tentative minimum tax

\text{AMTI} = \text{Taxable income} + \text{Deduction added back} + \text{ISO spread} + \text{Preferences}
\text{Exemption} = \max\left(0,\ \text{Base exemption} - 0.50 \times \max(0,\ \text{AMTI} - \text{Threshold})\right)
\text{TMT} = 0.26 \times \min(\text{Base}, 244{,}500) + 0.28 \times \max(0, \text{Base} - 244{,}500) \quad (\text{gains stay at } 0/15/20\%)
\text{AMT} = \max(0,\ \text{TMT} - \text{Regular tax})

For 2026 (Rev. Proc. 2025-32) the exemption is $90,100 single or head of household, $140,200 married filing jointly and $70,100 married filing separately; it phases out at 50 cents per dollar of AMTI above $500,000 ($1,000,000 joint), so it is gone at $680,200 ($1,280,400 joint). The 28 % rate starts at $244,500 of AMT base ($122,250 separately). Regular tax uses the same 2026 brackets and standard deduction as every tax page on this site; long-term gains keep their 0 / 15 / 20 % rates under both systems (Form 6251 Part III).

Calculating it by hand

  1. Choose your filing status; it sets the standard deduction, the brackets, the AMT exemption and where the phase-out starts.
  2. Enter your wages and other ordinary income for the year, before any deduction.
  3. Enter the ISO exercise spread: fair market value at exercise minus the strike price, for shares you still hold at 31 December.
  4. Enter long-term capital gains and qualified dividends, if any — they keep their 0 / 15 / 20 % rates but raise AMTI.
  5. Leave itemized deductions at 0 for the standard deduction, or enter your Schedule A total and the state and local taxes inside it (the SALT cap is applied for you).
  6. Open Advanced for private-activity bond interest and other Form 6251 adjustments.
  7. Read the AMT owed, the Form 6251 line by line, and the ISO spread you could still exercise before AMT begins.

Worked examples

Startup employee exercising ISOs (the default)

  1. Single, $180,000 wages, $150,000 ISO exercise spread, $20,000 long-term gains, standard deduction.
  2. Taxable income $200,000 − $16,100 = $183,900; regular tax $31,934 on the $163,900 of ordinary income plus 15 % × $20,000 = $34,934.
  3. AMTI = $183,900 + $16,100 standard deduction added back + $150,000 spread = $350,000; below $500,000, so the full $90,100 exemption applies.
  4. AMT base $259,900, of which $20,000 are gains: 26 % × $239,900 = $62,374 plus 15 % × $20,000 = $3,000 → tentative minimum tax $65,374.
  5. AMT = $65,374 − $34,934 = $30,440; the crossover shows AMT would begin at $32,923 of spread.

AMT owed $30,440.00; total federal tax $65,374.00 (32.7 % of $200,000).

Married couple itemizing in a high-tax state

  1. Married filing jointly, $400,000 wages, itemized deductions $52,000 of which $30,000 is state and local tax (under the $40,400 cap), no ISOs.
  2. Itemized $52,000 beats the $32,200 standard deduction: taxable income $348,000; regular tax $68,716.
  3. AMTI = $348,000 + $30,000 SALT added back = $378,000; the $140,200 exemption is intact; AMT base $237,800.
  4. Tentative minimum tax = 26 % × $237,800 = $61,828 (the 28 % rate starts at $244,500).
  5. Regular tax exceeds it by $6,888 — no AMT; about $25,079 of ISO spread could be exercised before AMT began.

AMT owed $0.00; a $6,888.00 margin before the tentative minimum tax takes over.

Executive with the exemption fully phased out

  1. Single, $500,000 wages, $250,000 ISO exercise spread, standard deduction.
  2. Taxable income $483,900; regular tax $138,134.25 (the 35 % bracket).
  3. AMTI = $483,900 + $16,100 + $250,000 = $750,000, above the $680,200 point where a single filer's exemption reaches zero.
  4. AMT base $750,000: 26 % × $244,500 = $63,570 plus 28 % × $505,500 = $141,540 → tentative minimum tax $205,110.
  5. AMT = $205,110 − $138,134.25 = $66,975.75.

AMT owed $66,975.75; total federal tax $205,110.00.

Methodology

How the alternative minimum tax works

Most people never meet the AMT — the 2026 exemption shelters $90,100 of income for a single filer. The ones who do are usually employees who exercised incentive stock options, because the paper gain counts as income under the AMT the year they exercise.

Read sources and limits

What an AMT calculator works out

An AMT calculator works out whether the alternative minimum tax applies to you by running your income through the second tax system in IRC §55: it adds back the deductions and preferences the AMT disallows to get alternative minimum taxable income, subtracts a phased-out exemption, applies the 26 % and 28 % rates to get the tentative minimum tax, and compares that with your regular tax. If the tentative minimum tax is higher, the difference is the AMT you owe.

This page follows Form 6251 line by line — taxable income (line 1), the deduction added back (2a), private-activity bond interest (2g), the ISO bargain element (2i), other adjustments (3), AMTI (4), the exemption (5), the AMT base (6), the tax on it (7), the tentative minimum tax (9), regular tax (10) and the AMT (11) — and the table under the chart shows each line for your inputs.

What triggers the alternative minimum tax?

For employees the dominant trigger is exercising incentive stock options and holding the shares past year end. For regular tax nothing happens at exercise; for the AMT, IRC §56(b)(3) treats the bargain element — fair market value minus strike price, times shares — as income that year. A $150,000 spread on top of $180,000 of wages produces $30,440 of AMT in 2026 for a single filer, even though no share was sold.

The second trigger is the deduction add-back. The standard deduction is not allowed for AMT (§56(b)(1)(E)), and state and local taxes deducted on Schedule A are added back in full. With the 2026 SALT cap at $40,400 (phased down above $505,000 of income to a $10,000 floor) the add-back is larger than it was under the $10,000 cap, which is why high-tax-state itemizers should check again this year. Tax-exempt interest from private-activity bonds and a handful of depreciation, depletion and passive-activity adjustments complete the list.

What is the AMT exemption for 2026 and how does it phase out?

For tax years beginning in 2026 the exemption is $90,100 for single filers and heads of household, $140,200 for married couples filing jointly and $70,100 for married filing separately (Rev. Proc. 2025-32 §4.10). It is subtracted from AMTI before the AMT rates apply, which is why a filer with no preferences and ordinary income under roughly $200,000 almost never owes AMT.

The One Big Beautiful Bill Act changed the phase-out for 2026. It now begins at $500,000 of AMTI ($1,000,000 joint), down from $626,350 ($1,252,700) in 2025, and the exemption is reduced by 50 cents for every dollar above that line instead of 25 cents. The exemption is therefore fully gone at $680,200 of AMTI for a single filer and $1,280,400 for a joint return. Inside that band each extra dollar of ISO spread adds $1.50 to the AMT base, so the effective AMT rate on that dollar is 39 % or 42 %, not 26 % or 28 %.

How the tentative minimum tax is calculated

The AMT base — AMTI minus the exemption — is taxed at 26 % up to $244,500 in 2026 ($122,250 married filing separately) and 28 % above that. Long-term capital gains and qualified dividends inside the base are not taxed at 26 or 28 %: Form 6251 Part III keeps them at 0 %, 15 % or 20 %, measuring the 0 % and 15 % room against your regular ordinary taxable income, exactly as the regular capital-gains worksheet does. Gains still matter, though, because they are part of AMTI and can push you into the exemption phase-out.

The result is the tentative minimum tax. Your regular tax is computed the ordinary way — the 2026 brackets on taxable income, with gains stacked on top at their own rates — and whichever is larger is what you pay. The excess over regular tax is reported as AMT on Schedule 2 of Form 1040. The chart on this page shows the two figures side by side, split into their rate layers, so the gap between them is the AMT.

How much ISO spread can I exercise without triggering AMT?

Because regular tax does not depend on the spread, there is a crossover: the amount of ISO spread at which the tentative minimum tax catches up with regular tax. Below it an exercise costs nothing extra this year; above it every dollar is taxed at 26 %, 28 % or more. The calculator solves for that crossover with your other inputs held fixed and prints it under the result. For a single filer with $180,000 of wages, $20,000 of long-term gains and the standard deduction it is about $32,900 of spread in 2026.

The crossover moves with everything else on the return — more wages raise regular tax and the room, a large SALT deduction lowers it. Use it to size an exercise, not to time one: this page gives no advice on when to exercise or sell, and ignores state AMT (California has its own) and the cash needed for the strike price.

The minimum tax credit (Form 8801) and what this page leaves out

AMT caused by timing items such as the ISO spread is not lost. Under IRC §53 it becomes a minimum tax credit, tracked on Form 8801, that reduces regular tax in later years when regular tax exceeds the tentative minimum tax — typically the year the shares are sold, when your AMT basis (the exercise-date value) is higher than your regular basis and the AMT gain is smaller. This page explains the credit; it does not compute it, because that needs the prior-year Form 6251 and the sale.

Also outside the model: the other Form 6251 adjustments (enter their net as one Advanced total), the AMT foreign tax credit, the kiddie-tax exemption limit and state alternative minimum taxes; the SALT cap is applied using the income you enter as modified AGI. This calculator gives an estimate for planning from the figures you enter and the published 2026 federal figures; it is not tax advice and not a tax return.

Alternative Minimum Tax questions

Do I have to pay the alternative minimum tax?

Only if your tentative minimum tax on Form 6251 is higher than your regular tax. With a 2026 exemption of $90,100 ($140,200 joint) a wage earner with no preferences almost never does: a single filer on $150,000 has a tentative minimum tax of $15,574 against $24,734 of regular tax. The people who pay are those with large ISO exercises, big state-and-local-tax deductions above a high income, or private-activity bond interest.

What is the AMT exemption amount for 2026?

$90,100 for single filers and heads of household, $140,200 for married filing jointly and $70,100 for married filing separately (IRS Rev. Proc. 2025-32 §4.10). The exemption phases out at 50 cents per dollar of alternative minimum taxable income above $500,000 ($1,000,000 joint) and is gone at $680,200 ($1,280,400 joint).

What are the AMT tax rates for 2026?

26 % on the first $244,500 of AMT base — alternative minimum taxable income minus the exemption — and 28 % above that ($122,250 for married filing separately). Long-term capital gains and qualified dividends in the base keep their 0 %, 15 % or 20 % rates under Form 6251 Part III.

How do incentive stock options trigger AMT?

Exercising an ISO and holding the shares past 31 December makes the bargain element — fair market value at exercise minus the strike price, times shares — income for AMT under IRC §56(b)(3), though not for regular tax. A single filer with $180,000 of wages and $20,000 of gains owes AMT on any spread above about $32,900 in 2026; a $150,000 spread produces $30,440 of AMT.

How much ISO can I exercise without paying AMT?

Up to the crossover where tentative minimum tax equals regular tax, which this calculator prints for your inputs. The arithmetic for a single filer: regular tax ÷ 26 % plus the exemption, minus taxable income and the standard deduction. With $180,000 of wages that is $31,934 ÷ 0.26 + $90,100 − $180,000 ≈ $32,900 of spread; more wages raise it, a large SALT deduction lowers it.

What deductions are added back for AMT?

The standard deduction in full (§56(b)(1)(E)) or, if you itemize, the state and local taxes deducted on Schedule A — up to the 2026 cap of $40,400, which phases down above $505,000 of income to a $10,000 floor. Mortgage interest and charitable gifts are not added back. Private-activity bond interest, the ISO spread, and depreciation, depletion and passive-activity adjustments are the other common Form 6251 items.

What changed for AMT in 2026 under the One Big Beautiful Bill Act?

Two things. The phase-out thresholds fell to $500,000 single and $1,000,000 joint (from $626,350 and $1,252,700 in 2025), and the phase-out rate doubled from 25 to 50 cents per dollar. The exemption amounts themselves rose with inflation to $90,100 and $140,200. The effect is that filers with AMTI between $500,000 and $680,200 ($1,000,000 and $1,280,400 joint) face an effective AMT rate of 39 % to 42 % on each extra dollar.

Is AMT paid on ISOs refundable?

Not refundable, but creditable. AMT caused by timing items such as the ISO spread becomes a minimum tax credit under IRC §53 (Form 8801) that offsets regular tax in a later year when regular tax exceeds the tentative minimum tax — usually the year the shares are sold, because your AMT basis in them is the higher exercise-date value. AMT from exclusion items such as the standard deduction or SALT does not generate a credit.

Does the AMT apply to long-term capital gains?

Gains are included in AMTI but are not taxed at 26 % or 28 %: Form 6251 Part III keeps them at 0 %, 15 % or 20 %, with the 0 % and 15 % room measured against your regular ordinary taxable income. They still matter because a large gain can push AMTI past $500,000 and shrink the exemption, which raises the tax on your ordinary AMT base.

Does the standard deduction count against AMT?

Yes — it is the first line added back on Form 6251 (line 2a), so for AMT purposes your income is taxable income plus the $16,100, $24,150 or $32,200 you deducted. For most filers the $90,100 or $140,200 exemption is far larger, which is why the add-back alone never causes AMT; it only matters once ISO spread or other preferences are on the return.

How is regular tax figured on Form 6251 line 10?

It is your Form 1040 income tax before credits: the 2026 brackets applied to taxable income, with long-term gains and qualified dividends taxed at their own rates, less the foreign tax credit. This page uses the same bracket tables as its income tax and tax bracket calculators, so a figure here matches those pages for the same inputs.

Source notes

Method, sources & limitations

Every figure on this page comes from the formula above applied to the values you enter. Nothing is estimated from market data, and no result is a forecast. These are the sources behind the method and any fixed figures it uses:

Written and maintained by CalculatorManager Editorial, Editorial team. Figures last verified .

Educational information only. Results are estimates produced from the assumptions you enter, and are not financial, tax, legal or medical advice. Check anything that matters against a qualified professional and the cited sources.

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