How to Calculate AMTI: Add-Backs, Form 6251, and 2026 Exemption

To calculate your alternative minimum taxable income (AMTI), start with your regular taxable income from Form 1040, then add back the deductions and preference items the alternative minimum tax disallows: state and local taxes, the standard deduction if you took it, the spread on any incentive stock options you exercised, interest from private activity bonds, and the difference between your regular and AMT depreciation. The total is your AMTI, and it goes on line 4 of Form 6251.¹ For tax year 2026, the AMT exemption then shields the first $90,100 of AMTI for single filers and $140,200 for married couples filing jointly.²

What You Need in Front of You

Pull your completed Form 1040 first. The taxable income figure (line 15 on the 2025 form) is where Form 6251 picks up.¹

You also need records for every itemized deduction, especially state and local taxes, since those get different treatment under the AMT. If you exercised incentive stock options during the year, get the Form 3921 your employer issued; it shows the exercise price and the fair market value on the exercise date.³ Brokerage statements matter too, because interest from private activity bonds is tax-exempt on your regular return but counts toward AMTI.⁴ Finally, if you depreciate business or rental property, keep your depreciation schedules handy so you can compare the regular-tax method against the AMT method.

The Add-Backs That Build AMTI

The AMT neutralizes specific tax breaks so they can’t reduce your bill below a set floor. Some items are timing differences (called adjustments); others erase a benefit entirely (preference items).⁵ Either way, they get added to your taxable income to produce AMTI.

State and Local Taxes

Any state and local income tax, sales tax, or property tax you deducted on Schedule A gets added back in full. The AMT has never permitted this deduction.⁵ For many filers, this is the largest single add-back.

The Standard Deduction

If you took the standard deduction instead of itemizing, add it back entirely. You don’t lose all benefit, because the AMT exemption comes in later in the calculation, but the standard deduction itself has no place in AMTI.⁵

The ISO Spread

When you exercise an incentive stock option, the gap between your exercise price and the fair market value on that date is the spread. For regular tax, nothing happens until you sell the shares. For AMT, the spread is income in the year of exercise.³ Exercise 1,000 shares at $1 when the stock trades at $5, and $4,000 lands in your AMTI, even though you haven’t sold a share.

Depreciation Differences

The AMT often requires a slower depreciation method than the regular tax, which shrinks the deduction in the early years. The adjustment is the difference between the two figures.¹

For property placed in service after 1998, personal property that uses the 200% declining balance method for regular tax switches to 150% declining balance for AMT. Real property using an accelerated method switches to straight-line. If you already use 150% declining balance or straight-line on the regular return, no adjustment is needed, and residential rental property placed in service after 1998 doesn’t need one either.¹

Later in an asset’s life, the AMT method can produce a larger deduction than the regular method. In that case the adjustment is negative and reduces your AMTI.

Private Activity Bond Interest

Interest from private activity bonds, the kind that finance airports, housing developments, and similar projects, is exempt on your regular return but is a preference item for AMT if the bond was issued after August 7, 1986.⁴ Municipal bond fund statements typically break out the portion of your interest that came from private activity bonds.

Other Items That Come Up Less Often

Mining exploration costs deducted immediately on the regular return must be spread over ten years for AMT.⁵ Percentage depletion on oil, gas, or mineral property produces a preference item to the extent the deduction exceeds the property’s adjusted basis. And mortgage interest on home equity debt is deductible for AMT only if the loan proceeds were used to buy, build, or substantially improve the home securing the loan.⁶

Working Through Form 6251

The form is denser than the math. Once you have the pieces, the calculation is straightforward.¹

Enter your regular taxable income from Form 1040. Follow the current year’s instructions; the exact line reference on Form 1040 can shift between years.
Add back the disallowed deductions. State and local taxes, the standard deduction if you took it, and any other itemized deduction the AMT disallows each get their own line.
Add the preference items. Enter the ISO spread and private activity bond interest.
Enter your depreciation adjustment. Regular depreciation minus AMT depreciation. Positive if the regular deduction was larger, negative if the AMT deduction is larger.
Total the column. The sum is your AMTI, reported on line 4 of Form 6251.

A Worked Example

Say your regular taxable income is $200,000. You itemized and deducted $10,000 in state income tax, and you exercised ISOs with a $50,000 spread. AMTI is $200,000 + $10,000 + $50,000 = $260,000.

Subtracting the 2026 Exemption

Once AMTI is set, subtract the exemption. For 2026 the amounts are:²

Married filing jointly or surviving spouse: $140,200
Single or head of household: $90,100
Married filing separately: $70,100

The exemption phases out at higher incomes. For every dollar of AMTI above the threshold, the exemption shrinks by 25 cents. The 2026 thresholds:²

Married filing jointly: $1,000,000
Single or head of household: $500,000
Married filing separately: $500,000

A single filer with AMTI of $260,000 sits well below $500,000, so the full $90,100 exemption applies. A single filer at $600,000 is $100,000 over the threshold, reducing the exemption by $25,000 to $65,100. The exemption disappears entirely for a single filer once AMTI reaches $860,400.⁷

What’s left after the exemption, called the taxable excess, is what the AMT rates apply to. For 2026, the first $244,500 of taxable excess is taxed at 26%, and the rest at 28%. The married-filing-separately breakpoint is $122,250.⁷ The result is your tentative minimum tax.

In the example, $260,000 − $90,100 = $169,900. At 26%, that produces a tentative minimum tax of $44,174.

AMTI Is Not the AMT You Owe

AMTI feeds the calculation, but it isn’t the tax bill. You owe AMT only if the tentative minimum tax exceeds your regular tax for the year, and the amount you owe is the difference between the two. If your regular tax is already higher, your AMT is zero.⁸

If the filer in the example owes $39,000 in regular tax, the AMT is $5,174 ($44,174 − $39,000), paid on top of the regular tax. If the regular tax comes to $46,000, the AMT is zero.

When Form 6251 Has to Be Filed Anyway

Running the AMTI calculation doesn’t mean you’ll owe. But you must attach Form 6251 to your return if your tentative minimum tax (before credits) exceeds your regular tax, even when credits bring the AMT itself to zero. You also file it if you claim credits that depend on the tentative minimum tax calculation, including the credit for prior year minimum tax on Form 8801 and certain general business credits.⁹ Tax software will pick this up on its own. If you’re working by hand or reviewing a preparer’s return, check the triggers before setting the form aside.

1
Internal Revenue Service. Instructions for Form 6251 (2025)
2
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
3
Internal Revenue Service. Topic No. 427, Stock Options
4
Internal Revenue Service. TEB Phase II – Lesson 4 General Rules for Private Activity Bonds
5
Office of the Law Revision Counsel. 26 USC 56 – Adjustments in Computing Alternative Minimum Taxable Income
6
Internal Revenue Service. Publication 936, Home Mortgage Interest Deduction
7
Office of the Law Revision Counsel. 26 USC 55 – Alternative Minimum Tax Imposed
8
Internal Revenue Service. Topic No. 556, Alternative Minimum Tax
9
Internal Revenue Service. 2025 Instructions for Form 6251