Key Takeaways
- The 2026 AMT exemption is $90,100 (single), $140,200 (married filing jointly), and $70,100 (married filing separately), per IRS inflation adjustments under the OBBB
- The exemption phase-out now starts at $500,000 of alternative minimum taxable income for singles and $1,000,000 for joint filers - down from $626,350 and $1,252,700 in 2025
- The phase-out rate doubled from 25% to 50%, so the exemption disappears twice as fast: fully gone at $680,200 (single) and $1,280,400 (joint) in 2026
- AMT rates remain 26% and 28%, with the 28% rate applying above $244,500 of excess AMTI in 2026
- Big AMT triggers to watch: exercising incentive stock options (ISOs), large capital gains, and high state/local tax situations
- If your income is anywhere near $500K (single) or $1M (joint), model your 2026 taxes now - quarterly estimated payments may need adjusting
The 2026 AMT exemption is $90,100 for single filers and $140,200 for married couples filing jointly — but the bigger story is the phase-out. Under the One Big Beautiful Bill (OBBB), the income levels where the exemption starts disappearing dropped sharply to $500,000 (single) and $1,000,000 (joint), and the exemption now phases out twice as fast.
The practical effect: households in the roughly $500,000 to $1.3 million income range who haven’t thought about the Alternative Minimum Tax in years may owe it again for tax year 2026. If that’s you (or might be), this is the year to run the numbers before December, not at filing time.
The AMT is a parallel tax system that makes higher-income taxpayers calculate their tax bill twice — once under the ordinary income tax rules and again under AMT rules — and pay the higher amount. Fortunately most online tax software does the dual calculation for you.
2026 AMT Thresholds and Exemptions (OBBB Rules)
Here are the IRS inflation-adjusted AMT amounts for tax year 2026 (returns filed in early 2027), reflecting the OBBB changes. See IRS Topic 556 for the official overview.
| Filing Status | AMT Exemption Amount | 28% Rate Applies Above (Excess AMTI) | Exemption Phase-out Range (AMTI) |
|---|---|---|---|
| Single/Unmarried | $90,100 | $244,500 | $500,000 to $680,200 |
| Married Filing Jointly / Surviving Spouses | $140,200 | $244,500 | $1,000,000 to $1,280,400 |
| Married Filing Separately | $70,100 | $122,250 | $500,000 to $640,200 |
2025 and 2024 AMT Thresholds (For Comparison)
| Filing Status | AMT Exemption Amount | 28% Rate Threshold | Exemption Phase-out Range |
|---|---|---|---|
| 2025 Single/Unmarried | $88,100 | $239,100 | $626,350 to $978,750 |
| 2025 Married Filing Jointly | $137,000 | $239,100 | $1,252,700 to $1,800,700 |
| 2025 Married Filing Separately | $68,650 | $119,550 | $626,350 to $900,350 |
| 2025 Estates and Trusts | $30,700 | $239,100 | $99,700 to $222,500 |
| 2024 Single/Unmarried | $85,700 | $232,600 | $609,350 to $952,150 |
| 2024 Married Filing Jointly | $133,500 | $232,600 | $1,218,700 to $1,751,900 |
| 2024 Married Filing Separately | $66,650 | $116,300 | $609,350 to $875,950 |
| 2024 Estates and Trusts | $29,900 | $232,600 | $99,700 to $219,300 |
Notice the pattern: exemption amounts kept rising with inflation, but the 2026 phase-out thresholds fell by more than $120,000 (single) and $250,000 (joint). That’s the OBBB returning the phase-out to its pre-2018-style structure — and it’s why the AMT is relevant again for a group of taxpayers who’d stopped worrying about it.
What Changed Under the One Big Beautiful Bill
The One Big Beautiful Bill (OBBB) made the higher TCJA-era AMT exemption amounts permanent — that’s the good news. Without it, the exemptions would have snapped back to much lower pre-2018 levels for everyone.
The trade-off came in the phase-out mechanics, effective in 2026: the phase-out thresholds reset to $500,000 (single) and $1,000,000 (joint), indexed for inflation going forward, and the phase-out rate accelerated from 25 cents to 50 cents of exemption lost per dollar of AMTI above the threshold.
That 50% phase-out creates a nasty effective marginal rate zone. Inside the phase-out range, each extra dollar of income costs you a dollar of tax on itself plus wipes out 50 cents of exemption — pushing effective marginal rates as high as the low-40s percent for income in that band.
Tax rules like this get tweaked every year, and I’ll update this page when the IRS releases new figures — subscribe here to get notified.
How the AMT Works
The AMT has two rates: 26% and 28%. In 2026, the 28% rate applies to excess alternative minimum taxable income (AMTI) above $244,500 ($122,250 for married filing separately). In contrast, regular tax rates run from 10% to 37%.
The catch is the base. Under AMT rules, a host of deductions available under the normal tax rules are added back — most notably the state and local tax (SALT) deduction. With the OBBB temporarily raising the SALT cap, high-tax-state filers claiming the bigger deduction are exactly the people the AMT add-back hits. Your AGI and taxable income are the starting point, but AMTI is its own calculation.
You calculate tax both ways and pay the higher amount. In reality, the only way to know if you owe AMT is to do your taxes twice — once under AMT rules and once under standard rules. I recommend good tax software, or an accountant if your return is complicated, since Form 6251 does this automatically.
Signs You May Owe AMT
Before you dig into the exemption math, a quick gut check I give readers every year. If two or three of these apply to you, budget time to run the AMT calculation before you file:
- Your AMTI falls inside or above the phase-out range — $500,000+ as a single filer, $1,000,000+ joint. This is where the OBBB’s steeper phase-out does the most damage.
- You claim a large state and local tax (SALT) deduction. SALT is fully disallowed under AMT rules regardless of what you claim under regular tax — the bigger your SALT write-off, the bigger the AMT add-back.
- You exercised in-the-money incentive stock options (ISOs). The bargain element — the gap between exercise price and market value — isn’t taxable income under regular rules until you sell, but it counts immediately under AMT.
- You have several dependents. A household with four or more personal/dependent exemptions used to be a classic AMT trigger. It matters less post-TCJA, but it still shows up in edge cases with complex family situations.
- You have a large home equity loan deduction. AMT rules only allow the interest deduction if loan proceeds went toward buying, building, or improving your home — not general home-equity borrowing.
- You have sizable miscellaneous itemized deductions — unreimbursed employee expenses, investment fees, tax prep fees. These are disallowed entirely under AMT.
- You have business depreciation write-offs on equipment, machinery, or furniture used in a sole proprietorship, partnership, LLC, or S-corp. AMT requires longer depreciation schedules, disallowing part of your regular deduction.
- You hold private activity bonds. Interest that’s tax-free under regular rules is a taxable preference item under AMT.
None of these guarantee you’ll owe AMT by itself — it depends on the full calculation — but stacking two or three of them is a strong signal to run Form 6251 (or let your tax software do it) before you file, not after.
Two Worked Examples for 2026
Example 1 — Mark, single, $450,000 AMTI. Mark is below the $500,000 phase-out threshold, so he keeps his full $90,100 exemption. His AMT base is $359,900. The first $244,500 is taxed at 26% ($63,570) and the remaining $115,400 at 28% ($32,312), for a tentative AMT of about $95,882. If his regular tax bill is higher than that — likely at his income — he owes no AMT. Mark is fine.
Example 2 — Sarah and James, married filing jointly, $1,200,000 AMTI after exercising ISOs. They’re $200,000 over the $1,000,000 threshold, so they lose $100,000 of their $140,200 exemption (50 cents per dollar), leaving $40,200. Their AMT base is $1,159,800, giving a tentative AMT of roughly $319,900. Under 2025 rules they would have kept their entire exemption (the old threshold was $1,252,700). The ISO exercise that was AMT-safe last year isn’t this year — this is the exact scenario to model before exercising.
Common Issues to Watch Out For
I get questions about the AMT every filing season, and the same mistakes come up:
- Exercising ISOs without modeling AMT first. The paper gain on incentive stock options is an AMT preference item even if you don’t sell a single share. Post-OBBB, the safe exercise window is much smaller for high earners.
- Assuming the AMT is only a “rich person’s tax.” Inside the new phase-out band ($500K–$680K single), effective marginal rates spike. Bonus income, large capital gains, or a one-time windfall can push you in unexpectedly.
- Forgetting the AMT credit. If you pay AMT because of timing items (like ISOs), you may earn a minimum tax credit you can use against regular tax in future years — many filers never claim it (Form 8801).
- Not adjusting estimated taxes. If the new phase-out catches you, your quarterly estimates based on 2025 rules will come up short, potentially triggering underpayment penalties.
- Married filing separately surprises. MFS filers hit the phase-out at the same $500,000 as singles but with a smaller exemption — one more reason to compare filing statuses carefully.
How Can I Avoid the AMT?
The realistic truth is that it’s difficult — the AMT is designed to be hard to plan around. But there are levers: timing ISO exercises across multiple years (and modeling each tranche), managing the recognition of large capital gains, being deliberate about the timing of deductions that are added back under AMT rules, and maximizing pre-tax retirement contributions, which reduce both regular taxable income and AMTI.
For a broader set of year-end moves that interact with the AMT, see the tax and financial planning playbook.
Looking Ahead: 2027 AMT Outlook
The 2027 AMT figures will be set by the IRS in its annual inflation adjustments, typically released in October or November 2026. Based on recent inflation trends (2–3%), I’d expect the exemption to land around $92,000–$92,500 for singles and $143,000–$144,000 for joint filers, with the phase-out thresholds indexed up modestly from $500,000/$1,000,000.
The structural OBBB changes — the lower thresholds and 50% phase-out rate — are permanent law, so barring new legislation, the “AMT is back” reality is here to stay. These are projections, not official numbers; I’ll update this page when the IRS releases the 2027 figures. Related reading:
- The tax and financial planning playbook for 2026–2027
- AGI vs. MAGI: figuring your IRS taxable income
- DIY tax software or a professional preparer?
