Every fall, the IRS quietly updates dozens of tax thresholds for inflation, and buried in that list is the exemption amount for the alternative minimum tax — a second, parallel calculation that some taxpayers have to run alongside their regular return. For tax year 2026, the agency has locked in new numbers for both the exemption itself and the income level where it starts phasing out, and the phase-out level moved in a direction that’s easy to miss. Anyone with large itemized deductions, incentive stock options, or a lot of non-wage income should know where they stand under the new figures well before filing season opens in 2027.
How the exemption actually works under Form 6251
The AMT runs a second version of taxable income, calculated on Form 6251, that adds back certain deductions and preference items the regular tax code allows. Once that alternative minimum taxable income is figured, each filer subtracts an exemption before the AMT’s own rate structure applies. For 2026, the exemption is $90,100 for single filers and $140,200 for married couples filing jointly, under the agency’s official inflation-adjustment release issued this fall. Below the phase-out threshold, filers keep the full exemption, which is why most households with straightforward W-2 income and the standard deduction never encounter the AMT at all, even though the law doesn’t exempt them by name.
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The phase-out line moved down, not up
What makes the 2026 numbers notable is the phase-out threshold, not just the exemption. The exemption begins shrinking once alternative minimum taxable income passes $500,000 for single filers and $1,000,000 for joint filers. That’s actually lower than where the phase-out started in 2025, when it began at $626,350 for single filers and $1,252,700 for joint filers under the prior year’s Revenue Procedure 2024-40. The IRS lists the new 2026 phase-out points under the provisions rewritten by the One, Big, Beautiful Bill, in the same section of Revenue Procedure 2025-32 that sets the $90,100 and $140,200 exemption amounts. In effect, the law reset the phase-out starting point back toward where it stood earlier in the Tax Cuts and Jobs Act era, rather than letting it keep climbing on the same inflation track as the exemption. A filer with alternative minimum taxable income around $550,000 would have kept the entire 2025 exemption but starts losing part of the 2026 exemption at that same income level.
Who actually ends up owing it
The AMT was built decades ago to stop a small number of high earners from using deductions to erase their regular tax bill, and it still tends to catch a similar profile today. Filers who exercise incentive stock options and hold the shares past year-end are a classic trigger, since the bargain element between the strike price and the market price counts as an AMT preference item even though it isn’t taxed yet under the regular rules. Consider a filer who exercises options with a $50,000 spread between the grant price and the current share value: none of that amount shows up in regular taxable income until the shares are sold, but it lands directly in alternative minimum taxable income the year the options are exercised. Filers with large state and local tax deductions, sizable miscellaneous business expenses, or interest from certain private-activity municipal bonds face similar exposure, because none of those items get subtracted from alternative minimum taxable income the way they reduce regular taxable income.
Marriage doesn’t double the shelter
Line up the single and joint numbers and a quirk shows up. Two single filers each get a $90,100 exemption, for a combined $180,200, but a married couple filing jointly gets only $140,200 — about $40,000 less than the same two incomes would receive if filed as separate single returns. The phase-out threshold, by contrast, is exactly doubled, from $500,000 to $1,000,000. That gap between the single and joint exemption amounts isn’t new to 2026, but it becomes more visible every time the underlying numbers move, and it means two-earner married households with heavy stock compensation or high state tax bills carry more AMT exposure than the same combined income would if it were split across two single returns.
The numbers are already final for the 2027 filing season
Because these figures come from the same October release that set the 2026 standard deduction and bracket thresholds, there’s no ambiguity or pending vote to watch. The IRS’s own announcement confirms the $90,100 single exemption, the $140,200 joint exemption, and the $500,000 and $1,000,000 phase-out points are the numbers taxpayers will use on returns filed in 2027 for income earned in 2026. Anyone expecting incentive stock option income, a large state tax bill, or other AMT preference items this year can run the Form 6251 worksheet against the 2026 figures now, rather than waiting until the return is due to find out whether the parallel tax applies.
This article was produced with AI assistance and reviewed by a human editor. Figures are linked to their primary sources; where a claim could not be verified from the public record, we say so.
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