AMT Calculator (Alternative Minimum Tax)

The Alternative Minimum Tax is a parallel tax system designed to ensure high-income taxpayers can't use too many deductions to escape taxation. You compute regular tax AND AMT, then pay whichever is higher. Under TCJA (now permanent), only ~200K filers pay AMT annually (vs ~5M pre-TCJA) because the exemption was raised sharply and SALT/personal-exemption add-backs were eliminated.

The AMT exemption would have dropped dramatically - from ~$87K single / $135K MFJ back to roughly ~$70K / $109K - and personal exemptions would have returned as AMT add-backs, with SALT deductible for regular tax but added back for AMT. The CBO estimated 5+ million additional filers would have paid AMT. That did not happen: OBBBA (July 2025) made the higher TCJA exemption permanent, so this calculator uses the lower figures only as a what-if comparison.

Either (1) exercise in a year with low other AMT preferences and limited bargain element so the spread fits under the exemption; (2) exercise + same-day sale (becomes ordinary income at exercise, no AMT preference but loses LTCG treatment); or (3) split exercises across multiple tax years. The higher AMT exemption that creates exercise room is now permanent under OBBBA, so the timing pressure of a looming sunset no longer applies. AMT credit can be recovered in future low-AMT years.

The AMT exemption phases out 25¢ per dollar of AMTI above $626,350 single / $1,252,700 MFJ. Once fully phased out, the entire AMTI is exposed to 26%/28% AMT rates. Result: there's a "sweet spot" around $250K-$500K AMTI where AMT bites the hardest as a fraction of total tax.