Alternative Minimum Tax (AMT) Calculator

Enter your regular taxable income, AMT adjustments, exemption amount, AMT rate, and regular tax liability to calculate your AMT liability and total tax owed.

Created by Luis GonzalezLast updated: June 9, 2026

How to Use This Calculator

1
Enter Income and AMT Parameters
Input your regular taxable income ($200,000), AMT adjustments ($50,000), AMT exemption amount ($85,700), AMT rate (26%), and regular tax liability ($35,000).
2
Review AMT Results and Planning Insights
Examine AMT Liability, Tentative Minimum Tax, and Total Tax Owed. The AMT Analysis panel shows your tax increase impact, AMTI breakdown, and planning strategies for reducing AMT exposure.

Example Calculation

A single filer with $200,000 taxable income exercised ISOs adding $50,000 in AMT adjustments. With an $85,700 exemption, 26% AMT rate, and $35,000 regular tax, does AMT apply?

Regular Taxable Income ($)

200,000

AMT Adjustments ($)

50,000

AMT Exemption Amount ($)

85,700

AMT Rate (%)

Regular Tax Liability ($)

35,000

Results

AMT Liability

$7,718.00

Tentative Minimum Tax

$42,718.00

Total Tax Owed

$42,718.00

Insights card shows 22.

Tips

Quantify Your AMT Exposure

With a $50,000 ISO exercise, AMT adds $7,718 to your tax bill — a 22.1% increase over regular tax. To eliminate AMT entirely, you'd need to reduce AMT adjustments by $29,685 (to ~$20,315). Knowing this threshold lets you size ISO exercises precisely.

Spread ISO Exercises Across Tax Years

The $50,000 ISO bargain element triggers $7,718 in AMT. Splitting the exercise into two years ($25,000 each) could reduce or eliminate AMT if each year's tentative minimum tax stays below regular tax. Run both scenarios through the calculator to compare.

Watch SALT Deduction Add-Backs

State and local taxes (SALT), while capped at $10,000 for regular tax, are entirely added back for AMT. If you pay $20,000 in state/local taxes, all $20,000 becomes an AMT adjustment — compounding with ISO exercises to push you further into AMT territory.

Track AMT Credits for Future Years

The $7,718 AMT paid on ISO exercises generates a Minimum Tax Credit (MTC) on Form 8801. When you sell the ISO shares and pay regular capital gains tax, the MTC offsets your regular tax — effectively recovering the AMT paid. Keep records of all AMT payments.

Understanding the Alternative Minimum Tax

The Alternative Minimum Tax (AMT) Calculator determines whether you owe additional tax under the parallel AMT system.

For a single filer with $200,000 taxable income and a $50,000 ISO exercise, the tentative minimum tax is $42,718 — exceeding the $35,000 regular tax by $7,718.

In 2026, with ISO exercises and SALT deductions as primary triggers, understanding your AMT exposure helps you time stock option exercises and manage deductions to minimize this parallel tax.

How AMT Calculation Works

The AMT operates as a parallel tax system.

You add AMT adjustments (items treated differently under AMT rules) to your regular taxable income, subtract the AMT exemption, and apply the AMT rate.

If the result exceeds your regular tax, you pay the difference.

AMTI = Regular Taxable Income + AMT Adjustments
AMT Base = max(AMTI - AMT Exemption, 0)
Tentative Minimum Tax = AMT Base x AMT Rate
AMT Liability = max(Tentative Min Tax - Regular Tax, 0)

💡 For estate and wealth transfer tax planning, our Estate Tax Planning Calculator helps assess future tax obligations.

Worked Example: ISO Exercise Triggers AMT

A single filer has $200,000 taxable income and exercised ISOs with a $50,000 bargain element (AMT adjustment).

AMT exemption is $85,700, AMT rate is 26%, and regular tax liability is $35,000.

AMTI: $200,000 + $50,000 = $250,000
AMT Base: max($250,000 - $85,700, 0) = $164,300
Tentative Minimum Tax: $164,300 x 26% = $42,718
AMT Liability: max($42,718 - $35,000, 0) = $7,718

Result: AMT is triggered.

The $50,000 ISO exercise generates $7,718 in additional tax — a 22.1% increase over regular tax.

Total tax owed is $42,718.

To eliminate AMT, the filer would need to reduce the ISO exercise to ~$20,315 in bargain element, keeping the tentative minimum tax at or below $35,000.

💡 For understanding payroll taxes alongside income tax, our FICA Tax Calculator breaks down Social Security and Medicare contributions.

Common AMT Triggers in 2026

The most frequent AMT trigger is incentive stock option (ISO) exercises, where the bargain element (market price minus strike price) is added back as an AMT adjustment.

In this example, a $50,000 bargain element pushes tentative minimum tax $7,718 above regular tax.

SALT deductions are another major trigger — state and local taxes are entirely added back for AMT, compounding with ISO exercises.

Other triggers include accelerated depreciation on business property and interest from private activity municipal bonds.

Strategic AMT Planning for ISO Exercises

The key to minimizing AMT on ISO exercises is knowing your threshold — the maximum AMT adjustment before AMT triggers.

To find it: calculate tentative minimum tax at your current income without ISOs, subtract from regular tax, and divide the cushion by the AMT rate.

For this filer without ISOs: AMTI would be $200,000, above exemption = $114,300, tentative min = $29,718, cushion = $35,000 - $29,718 = $5,282.

That means only $5,282 / 0.26 = $20,315 in ISO bargain element fits under the AMT threshold.

The $50,000 exercise exceeds this by $29,685, generating the $7,718 AMT.

Splitting the exercise across 3 years (~$17,000/year) would avoid AMT entirely.

Frequently Asked Questions

What is the Alternative Minimum Tax (AMT)?

The AMT is a parallel federal tax system ensuring high-income taxpayers pay at least a minimum amount. You calculate tax under both systems and pay whichever is higher. In this example, the tentative minimum tax ($42,718) exceeds regular tax ($35,000), so you owe the $7,718 difference as AMT. Primary triggers include ISO exercises, SALT deductions, and accelerated depreciation.

How do I know if AMT applies to me?

AMT applies when your tentative minimum tax exceeds your regular tax liability. Calculate AMTI (regular income + adjustments), subtract your exemption, multiply by the AMT rate (26% or 28%), and compare to regular tax. In this example, $250,000 AMTI minus $85,700 exemption = $164,300, taxed at 26% = $42,718 tentative minimum tax, which exceeds the $35,000 regular tax by $7,718.

What are the 2026 AMT exemption amounts?

For 2026, AMT exemptions are approximately $85,700 for single filers and $133,300 for married filing jointly. These phase out at $609,350 (single) and $1,218,700 (MFJ) — losing $0.25 of exemption per $1 above those thresholds. Once fully phased out, your entire AMTI is subject to the AMT rate.

What's the difference between the 26% and 28% AMT rates?

The 26% rate applies to the first ~$239,100 of AMT income above the exemption (2026 projected). Income above that threshold is taxed at 28%. In this example, $164,300 above the exemption is entirely within the 26% bracket. The 28% rate primarily affects taxpayers with AMTI exceeding ~$324,800 (single) after exemption.

Can I recover AMT paid on ISO exercises?

Yes, through the Minimum Tax Credit (MTC) on Form 8801. AMT paid due to ISO exercises (a timing difference) generates credits you can use against regular tax in future years — typically when you sell the shares and recognize the gain under regular tax rules. The MTC carries forward indefinitely. AMT from permanent items like SALT add-backs does not generate recoverable credits.