Alternative Minimum Tax Calculator
Estimate whether regular federal tax or AMT is higher using current exemption and phaseout figures. Educational only — not Form 6251.
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Informational only — not a substitute for a tax, legal, or investment professional who knows your facts. About the publisher
Estimate whether the alternative minimum tax could exceed your regular federal income tax. AMT is a parallel system with its own exemption, phaseout, and 26% / 28% rates. This page is a planning sketch, not Form 6251.
What AMT is for
Congress built AMT so that high-income people who stack deductions and exclusions still pay a floor of tax. You compute regular tax the normal way, compute tentative minimum tax the AMT way, and pay whichever is higher. You do not add the two together.
TCJA shrunk the AMT population by raising the exemption and the phaseout thresholds. It did not delete AMT. The OBBBA then pulled those phaseout thresholds back down and steepened the phaseout, which is why “AMT is dead” is a dangerous slogan for anyone exercising ISOs or living in a high-tax state with a large income.
This calculator sits on the federal income tax hub. Pair it with the federal tax bracket calculator for regular tax and with the ISO tax calculator if you are exercising incentive stock options.
Regular tax versus tentative minimum tax
Regular tax starts from taxable income after the standard deduction or itemized deductions, then applies ordinary brackets and preferential rates on qualified dividends and long-term gains.
AMT starts from taxable income, then adds back preference items and makes other adjustments (the classic ones: certain state-and-local tax, some miscellaneous deductions that still exist in limited form, private-activity bond interest, and the bargain element of an ISO exercise that is not a disqualifying disposition). It then subtracts the AMT exemption (phased out at higher income) and applies 26% and 28%.
If tentative minimum tax is $48,000 and regular tax is $41,000, AMT is the $7,000 difference and your total is $48,000. If regular tax is already $52,000, AMT is zero this year.
Exemption, phaseout, and why OBBBA stung
AMT still has a large exemption — on the order of $90,100 single and $140,200 joint in the current parameter set this tool uses — so a typical W-2 household with a standard deduction never sees AMT.
The exemption phases out once AMT income crosses the threshold ($500,000 single / $1,000,000 joint under the OBBBA figures this model uses, down from the higher TCJA thresholds). The phaseout rate is 50% in this model, double the old 25%. That means each extra dollar of AMT income above the threshold can eat fifty cents of exemption, which is a steep hidden marginal rate on top of the 26% / 28% AMT rates.
If your income is near those thresholds, small changes — a bonus, a Roth conversion, an ISO exercise — can both raise AMTI and destroy exemption. Run the calculator twice: once with the extra income, once without.
The IRS inflation adjustments guide and the OBBBA tax-changes guide put these parameters next to the rest of the year’s inflation tables.
Who should actually worry
ISO exercises. The spread between FMV and strike is AMT income if you hold the shares. Regular tax may show little or nothing until you sell. AMT can produce a cash tax bill on paper gain. That is the number-one AMT horror story of the last twenty years. Model it on the ISO tax calculator before you click “exercise and hold.”
High state tax, if you itemize. SALT is a preference add-back for AMT. The SALT cap already limits the regular-tax deduction; AMT can still treat remaining state-tax effects differently than you expect. Do not assume a standard-deduction filer has a SALT AMT problem.
Private activity municipal bonds. Tax-exempt for regular tax, often in AMT income.
Certain business and depreciation preferences. Less common for employees; more common on complex 1040s with Schedule C/E/F and accelerated depreciation. The MACRS depreciation calculator is about regular-tax cost recovery, not a full AMT adjustment engine.
Upper-middle income after OBBBA. People who ignored AMT from 2018–2025 should rerun it if they are near the new phaseout line, even without ISOs.
You generally should not panic about AMT if you take the standard deduction, have only W-2 wages, and sit well below the phaseout. Still, a one-time event (ISO, huge bonus, huge capital gain that feeds AMTI) can change that in a single year.
AMT and capital gains
Long-term capital gains and qualified dividends still get preferential rates inside the AMT computation, but they inflate AMTI and can phase out the exemption. A large gain can therefore create AMT even when the gain itself is taxed at 15% or 20% for regular tax.
The 3.8% NIIT is a different surtax on investment income. It is not AMT. High-investment households should run both the NIIT calculator and this page.
Credits and the minimum tax credit
Some credits are limited under AMT. Others generate a minimum tax credit you carry to future years when regular tax exceeds tentative minimum tax — the usual path after an ISO-year AMT spike, as you sell shares and regular tax “catches up.”
This calculator does not compute the credit, Form 8801, or the timing of recovery. Keep basis and AMT-basis records. A CPA who has done ISO returns is worth more here than another blog post.
How to use the output
- Enter income and filing status consistently with a draft 1040, not with gross salary.
- If you exercised ISOs, include the bargain element in the AMT-oriented inputs the form asks for.
- Compare tentative minimum tax with regular tax from the bracket calculator.
- If AMT appears, look for a lever: delay an ISO exercise, make a disqualifying disposition intentionally (sometimes worse), harvest a loss, or avoid a same-year Roth conversion.
- Recheck withholding. AMT does not show up in a simple W-4. You may need extra withholding or estimates — see the tax withholding calculator.
Timing tricks that actually matter
ISO exercise date. Exercising in January gives you almost a year to decide whether to sell in a disqualifying disposition if AMT would be ruinous, and it gives you time to withhold or estimate. Exercising in December with no cash plan is how people borrow to pay AMT on illiquid private-company stock.
Same-year stacking. A Roth conversion, a large bonus, and an ISO exercise in the same calendar year can phase out the AMT exemption and push ordinary tax into 32%+ at the same time. Spreading those events across years is often worth more than any deduction trivia. Model the conversion on the Roth conversion calculator and MAGI on the MAGI calculator.
State estimated payments. Paying a huge state estimate in December to “manufacture” a SALT deduction rarely helps AMT, and the SALT cap already blocks most of the regular-tax benefit. Do not prepay state tax just to game this calculator.
What “AMT is $0” does not mean
Zero AMT this year does not mean you can ignore Form 6251 software forever. A later ISO year can create a credit you only recover when regular tax exceeds TMT. Conversely, paying AMT this year does not mean you did something wrong. It may be the correct price of holding ISO shares for long-term treatment.
If you also have rental losses, QSBS, or opportunity-zone deferrals, those rules interact with AMT in ways this page cannot encode. Keep the QSBS calculator and opportunity zone calculator in the same planning packet, and have one person who sees the whole return.
How to use this calculator
Start from a draft of regular taxable income, then add the preference items you actually have (ISO spread is the big one). Compare tentative minimum tax with regular tax from the bracket tool. If TMT is lower, AMT is not your constraint this year. If TMT is higher, the difference is the extra tax to fund with withholding or estimates.
Rerun after any change that moves income by five figures. AMT is not a “set in January” number. It is a year-end number that can flip on one exercise confirmation email. If you work at a company that grants ISOs every year, put a calendar reminder before each grant’s typical exercise window rather than discovering AMT on a draft return in March. Bring last year’s Form 6251 to that reminder so you can see whether you still have a minimum tax credit waiting. None of this is a filed Form 6251. Print or screenshot the comparison if you need a record; we do not save ISO spreads or income.
Informational use only
AMT is one of the most form-driven computations in the individual code. This tool uses simplified current parameters and cannot apply every Form 6251 line, every credit limitation, or every state conformity rule. It does not guarantee IRS agreement. Use official instructions and a qualified professional before you exercise options or make a large-year planning move.
Related: ISO tax calculator, federal tax bracket calculator, federal income tax hub, NIIT calculator.