What is the Alternative minimum tax exemption?
The alternative minimum tax exemption is a set dollar amount subtracted from your alternative minimum taxable income before AMT rates apply. For 2026, the exemption is $90,100 for single filers and $140,200 for married filing jointly. OBBBA Sec. 70107 made these elevated amounts permanent and indexed them for inflation. The exemption phases out at $500,000 (single) and $1,000,000 (MFJ), with the exemption reduced by $0.25 for each dollar of AMTI above those thresholds. Without the exemption, all AMTI would be subject to the 26% and 28% AMT rates. Reducing your AMTI through strategies like a Traditional 401k contribution lowers your AMT exposure.
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