The AMT exemption for 2026 is $90,100 for single filers and heads of household, $140,200 for married couples filing jointly, and $70,100 for married filing separately. That amount is subtracted from your alternative minimum taxable income before any AMT rate applies, so if your AMTI falls below the exemption, you owe no AMT at all. The figures are inflation-adjusted each year and were published by the IRS in its 2026 revenue procedure.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
Exemption Amounts by Filing Status
- Single filers and heads of household: $90,100
- Married filing jointly: $140,200
- Married filing separately: $70,100
The exemption works like a standard deduction inside the AMT system. You calculate AMTI, subtract the exemption, and only the remainder is exposed to AMT rates. Most middle-income households never reach that remainder because their AMTI stays under the exemption threshold.
Where the Exemption Starts to Phase Out
The exemption shrinks once AMTI climbs above a threshold tied to your filing status:
- Single filers and heads of household: phase-out begins at $500,000
- Married filing jointly: phase-out begins at $1,000,000
- Married filing separately: phase-out begins at $500,000
For every dollar of AMTI above the threshold, the exemption drops by 50 cents.2Tax Foundation. 2026 Tax Brackets and Federal Income Tax Rates That is twice the 25-cent-per-dollar rate that applied from 2018 through 2025, which means the exemption now disappears across a much narrower income band.
A quick example. A single filer with $540,000 of AMTI is $40,000 over the $500,000 threshold. Half of that excess, $20,000, comes off the $90,100 exemption, leaving $70,100. The exemption reaches zero once AMTI hits $680,200. For married couples filing jointly, the full $140,200 exemption is gone at $1,280,400 of AMTI.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
Married couples filing separately face an additional penalty. If your AMTI exceeds the point where the exemption would already have reached zero, you have to add a portion of that further excess back into AMTI, which raises your tax base above what a joint filer at the same income would see.3Office of the Law Revision Counsel. 26 U.S. Code 55 – Alternative Minimum Tax Imposed Filing separately almost always produces a worse AMT result than filing jointly.
Rates That Apply After the Exemption
Whatever AMTI remains after the exemption is taxed at one of two rates:
- 26% on the first $244,500 above the exemption ($122,250 for married filing separately)
- 28% on anything above that
Long-term capital gains and qualified dividends keep their preferential rates inside the AMT calculation rather than being pulled up to 26% or 28%.2Tax Foundation. 2026 Tax Brackets and Federal Income Tax Rates You only owe AMT if the tax calculated under this system is higher than your regular income tax. Form 6251 is where the comparison happens and where the exemption and phase-out are worked out.4Internal Revenue Service. Instructions for Form 6251
Who Is Most Likely to Hit AMT in 2026
A few items push AMTI up fast enough to matter once you are near the phase-out zone.
State and local taxes are the biggest one. The SALT deduction you claim on your regular return gets added back for AMT purposes. For 2026, the regular SALT cap is $40,400 for most filers and begins phasing down for incomes above $505,000.5United States House of Representatives. Frequently Asked Questions: Tax Changes 2026 and the One Big Beautiful Bill Taxpayers in high-tax states feel this add-back the hardest.
Incentive stock options are the other classic trigger. Exercising ISOs creates no regular taxable event, but the AMT treats the spread between exercise price and fair market value as income in the year of exercise.6Office of the Law Revision Counsel. 26 U.S. Code 56 – Adjustments in Computing Alternative Minimum Taxable Income A large exercise in a single year can produce a six-figure AMT bill on paper gains, and if the stock later falls, the tax obligation remains.
Interest from most private activity bonds is tax-exempt on your regular return but counts as income for AMT. Qualified 501(c)(3) bonds and certain other categories stay exempt under both systems.7National Association of Bond Lawyers. Alternative Minimum Tax If your municipal bond holdings are heavy, check the category before assuming the interest is fully tax-free.
Why 2026 Looks Different From Recent Years
The One Big Beautiful Bill Act, signed in 2025, made the higher Tax Cuts and Jobs Act exemption amounts permanent but reset the phase-out thresholds to levels closer to 2018 and doubled the phase-out rate from 25% to 50%.8Congressional Research Service. Tax Provisions in H.R. 1, the One Big Beautiful Bill Act Middle-income households remain largely protected, but the exemption now disappears quickly for earners between roughly $500,000 and $1.3 million. The Tax Policy Center projects that more than 70% of taxpayers with income between $500,000 and $1 million will face AMT in 2026, compared with about 2% during the TCJA years.9Tax Policy Center. Who Pays the AMT?
If you plan to exercise ISOs, itemize significant state and local taxes, or expect income in that phase-out band, running a preliminary AMT calculation before year-end is worth the effort. Strategies like spreading ISO exercises across multiple tax years or adjusting estimated payments have to be in place by December 31.
When AMT You Pay Can Come Back Later
Paying AMT does not always mean the money is gone. If your AMT liability came from timing-related adjustments, called deferral items, you can claim a minimum tax credit against regular tax in future years using Form 8801.10Internal Revenue Service. Topic No. 556, Alternative Minimum Tax The ISO spread is the standard example: AMT paid at exercise raises your AMT basis, and when you eventually sell the stock, the credit helps offset regular tax.
Exclusion items are different. The SALT add-back is a permanent difference, so AMT triggered by state and local taxes does not generate a credit you can recover later. Many taxpayers assume every AMT payment produces a future credit; it does not.