The AMT Exemption

Because the alternative minimum tax (AMT) was never intended to apply to lower and middle income taxpayers who have small amounts of AMT adjustment or preference items, an exemption is provided to taxpayers to generally prevent them from being subject to the AMT.

The AMT exemption is an amount that a taxpayer is allowed to deduct from alternative minimum taxable income before calculating the taxpayer’s AMT liability. The exemption amount for a particular taxpayer depends on the taxpayer’s
filing status. To prevent upper-income taxpayers from benefiting from the AMT exemption, the exemption phases out after a taxpayer’s AMTI reaches a certain level, also based on the taxpayer’s filing status.

AMT Exemption Amounts - 2025

For 2025, the AMT exemption amounts for taxpayers not subject to the exemption phase-out are:

Filing Status                    Amount

Single or Head                  $88,100

of Household

Married Filing Jointly         $137,000

or Surviving Spouse

Married Filing Separately    $68,500

A child subject to the kiddie tax rules for regular tax purposes determines his or her AMT exemption under special rules in Code Sec. 59(j)(1). The AMT exemption for a child subject to the kiddie tax is the lesser of the AMT
exemption for a single taxpayer or the total of the child's earned income plus $5,000, indexed for inflation. For 2025, the amount indexed for inflation is $9,550.

Exemption Phase-Out and Phase-Out Thresholds - 2025

The AMT exemption amount is reduced one dollar for every four dollars of AMTI above the threshold amount for the taxpayer’s filing status.

Exemption phase-out thresholds: The 2025 phase-out thresholds are:

Filing Status                      AMTI

Single or Head of             $626,350

Household

Married Filing Jointly      $1,252,700

or Surviving Spouse

Married Filing                  $626,350

Separately

EXAMPLE: Tim and Heather, a couple filing jointly, have AMTI of $1,267,100 in 2025. Their AMT exemption is $136,400 which is the full exemption amount of $137,000 less $3,600 [.25 x ($1,267,100 - $1,252,700)].

AMTI level at which exemption completely phased out: Because the AMT exemption phase-out is controlled by the amount of the exemption for a filing status and the amount that AMTI exceeds the phase-out threshold for that filing status, there is a common AMTI level where the exemption for each filing status phases out completely for all taxpayers filing under that status. The exemption phases out completely at the following levels in 2025:

Filing Status                      AMTI

Single or Head of            $978,750

Household

Married Filing Jointly      $1,800,700

or Surviving Spouse

Married Filing                  $875,950

Separately

Exemption & Phaseout Thresholds in 2026

The AMT exemption amounts for  2026 are $$90,100 for taxpayers filing single or head of household, $140,200 for taxpayers filing married filing jointly or qualifying widower, and $70,100 for taxpayers filing married filing separately.

The One Big Beautiful Bill Act of 2025 (the OBBBA) set the AMT exemption phase-out thresholds at $500,000 of AMTI for taxpayer’s filing single, head-of-household, and married filing separately and $1,000,000 of AMTI for taxpayers filing married filing jointly or qualifying widower. The threshold amounts will be adjusted for inflation after 2026.

Also, beginning in 2026, the OBBBA increased the exemption phase-out percentage 25% to 50%. Thus, the exemption in 2026 will be reduced by $1 of for every $2 of AMTI exceeds the threshold amounts. The exemption will phase-out completely for taxpayer filing single, head-of-household, or married filing separately at AMTI of $680,200 and for taxpayers filing married filing jointly or qualifying widower at AMTI $1,280,400.

EXAMPLE: Mike, a taxpayer filing single, has AMTI of $590,100 in 2026. His AMT exemption is $45,050, which is the full exemption amount of $90,100 less $45,050 [.50 x ($590,100 - $500,000)]

Need more help with the AMT Exemption rules?

Submit your question to the AMT Advisor.