Alternative Minimum Tax (AMT) Calculator
This calculator estimates your 2025 Alternative Minimum Tax (AMT) liability. The AMT is a parallel federal income tax system designed to ensure high-income taxpayers pay a minimum amount of tax despite large deductions or tax preferences. You compute tax under both the regular system and the AMT system, then pay whichever is higher. Enter your regular taxable income, filing status, and AMT adjustments (items added back such as ISO exercise bargain elements, state and local tax deductions, accelerated depreciation, and miscellaneous itemized deductions). The calculator applies the 2025 AMT exemption and phase-out thresholds from IRS Rev. Proc. 2024-40, then computes your Alternative Minimum Taxable Income (AMTI), applies the exemption (reduced by phase-out), applies the 26% or 28% AMT rate, and compares the result to your regular tax. The AMT most often affects single filers with AMTI between roughly 626,000 and 980,000 and married filing jointly filers with AMTI between roughly 1.25 million and 1.80 million, though the precise threshold depends on deductions and adjustments. Helpful for executives with stock options, high-income earners with substantial deductions, and business owners.
With $200,000 regular taxable income, $50,000 in AMT adjustments, filing as single: AMTI is --, tentative minimum tax is --, and AMT owed is --.
How the AMT is calculated
The AMT computation has five steps, each defined by IRS Form 6251 and its instructions (IRS Instructions for Form 6251).
1. AMTI = regular taxable income + AMT adjustments and preferences
2. Exemption = base exemption - 0.25 x max(0, AMTI - phase-out threshold) [min 0]
3. AMT base = max(0, AMTI - exemption)
4. Tentative minimum tax = 26% x min(AMT base, $232,600) + 28% x max(0, AMT base - $232,600)
5. AMT owed = max(0, tentative minimum tax - regular tax)
2025 AMT parameters (IRS Rev Proc 2024-40)
| Filing status | Exemption | Phase-out starts |
|---|---|---|
| Single / MFS | $88,100 | $626,350 |
| MFJ / Surviving spouse | $137,000 | $1,252,700 |
| Estate / Trust | $30,700 | N/A |
The 26% rate applies on AMTI (after exemption) up to $232,600 ($116,300 for married filing separately). The 28% rate applies above that threshold. These bracket amounts are set by IRS Rev Proc 2024-40.
Worked example
Single filer, regular taxable income $200,000, AMT adjustments $50,000, regular tax $38,079:
- AMTI = $200,000 + $50,000 = $250,000
- AMTI ($250,000) is below phase-out start ($626,350), so exemption is full $88,100
- AMT base = $250,000 - $88,100 = $161,900
- Tentative minimum tax = 26% x $161,900 = $42,094
- AMT owed = $42,094 - $38,079 = $4,015
Common AMT adjustments include exercising incentive stock options (ISOs), the state and local tax (SALT) deduction, miscellaneous itemized deductions, and accelerated depreciation on business assets. The full list of adjustments is on IRS Form 6251.
Understanding the AMT exemption phase-out
The AMT exemption phases out for high earners. For every dollar of AMTI above the phase-out threshold, the exemption is reduced by 25 cents. This means the phase-out creates an effective marginal AMT rate higher than 26% or 28% during the phase-out range, because each additional dollar of income reduces the exemption by $0.25, adding an extra $0.065 to $0.07 of tax on top of the stated rate.
For single filers in 2025, the exemption is fully phased out at $626,350 + (4 x $88,100) = $978,750 of AMTI. For joint filers, the exemption is fully phased out at $1,252,700 + (4 x $137,000) = $1,800,700 of AMTI. Above these levels, the AMT applies to the full AMTI with no exemption reduction.
AMT and incentive stock options (ISOs)
Exercising ISOs is one of the most common triggers of the AMT for individual taxpayers. When you exercise an ISO, the "bargain element" (fair market value minus exercise price) is not taxable for regular income tax purposes, but it is an AMT preference item that is added back to compute AMTI. If the stock declines in value after exercise, taxpayers can find themselves owing AMT on paper gains they have not realised in cash. Planning ISO exercises across calendar years can reduce this exposure.
AMT calculator: frequently asked questions
What is the Alternative Minimum Tax?
The Alternative Minimum Tax is a parallel federal income tax system designed to ensure that high-income taxpayers pay at least a minimum amount of tax, even if they benefit from large deductions or tax preferences. Taxpayers compute their tax under both the regular system and the AMT system, then pay whichever is higher. The excess of the tentative minimum tax over regular tax is reported on IRS Form 6251.
Who is most at risk of owing AMT?
Taxpayers most at risk include those who exercise incentive stock options (ISOs), those with large state and local tax (SALT) deductions, those who claim accelerated depreciation on business property, and those with high income who use many itemized deductions. The phase-out of the AMT exemption means the tax most often hits single filers with AMTI between roughly $626,000 and $979,000 and joint filers with AMTI between roughly $1.25 million and $1.80 million.
What is AMTI (Alternative Minimum Taxable Income)?
AMTI is regular taxable income adjusted by adding back certain tax preference items and making required adjustments. Common add-backs include the bargain element from exercising ISOs, the SALT deduction, miscellaneous itemized deductions, certain accelerated depreciation, and tax-exempt interest from some private activity bonds. The full list of adjustments is on IRS Form 6251 and its instructions.
Does the AMT apply to capital gains?
Long-term capital gains and qualified dividends are taxed at the same preferential rates (0%, 15%, 20%) under both the regular tax and the AMT. However, capital gains income increases AMTI, which can reduce or eliminate the AMT exemption via the phase-out, potentially increasing the AMT indirectly. Capital gains themselves are not subject to the 26% or 28% AMT rates.
Can I get a credit for AMT paid in prior years?
Yes. AMT paid on so-called 'deferral items' (such as ISO exercises) generates a Minimum Tax Credit that can be used in future years when your regular tax exceeds your tentative minimum tax. This credit is claimed on IRS Form 8801. AMT paid on exclusion items (such as the SALT deduction) does not generate a credit.
How does the AMT exemption phase-out work?
The AMT exemption is reduced by 25 cents for every dollar of AMTI above the phase-out threshold. For 2025, the phase-out starts at $626,350 for single filers and $1,252,700 for married filing jointly. The exemption is fully phased out once AMTI reaches $626,350 + (4 x $88,100) = $978,750 for single filers. Source: IRS Rev Proc 2024-40.
Official sources
- 2025 AMT exemption and phase-out amounts: IRS Rev Proc 2024-40.
- AMT computation form: IRS Form 6251, Alternative Minimum Tax - Individuals.
- AMT instructions: IRS Instructions for Form 6251.
Reviewed by the CalculatorHub team, edited by James Graham, 13 June 2026. See our methodology. General information only, not tax advice.