What is Alternative Minimum Tax (AMT)?

Why does alternative minimum tax exist?
Joseph Barr, 59th United States Secretary of the Treasury, made headlines when he told Congress that 155 high-income households did not pay any federal income taxes in 1966. American taxpayers were furious and AMT was created into law by the end of 1969. AMT was designed to prevent taxpayers from using tax law loopholes to avoid paying their fair share of taxes. [1]

What is the alternative minimum tax (AMT)?
The alternative minimum tax is a parallel tax system from the regular federal income tax. When you input your data into the tax software, the tax software runs your tax liability on the regular federal income tax table and the alternative minimum tax table. Your tax liability will be the higher of the two tax tables. For example, if the tax software says you owe $50,000 on the regular federal income tax table and $40,000 on the alternative minimum tax table, your total tax liability is $50,000. If the tax software says you owe $50,000 on the regular federal income tax table and $70,000 on the alternative minimum tax table, your total tax liability is $70,000. Regular federal income tax liabilities of $50,000 + (AMT liabilities of $70,000 - regular federal income tax liabilities of $50,000) = $70,000. Technically, that is how we calculate the total tax liability, but for simplicity, it’s easier to understand when we say we paid the total tax liability of the higher two tax tables. Thus, alternative minimum tax only applies when our alternative minimum tax liability exceeds our regular federal income tax liability. With the current law, most households are not subject to AMT because of the large AMT exemption.

How to calculate alternative minimum tax
If you really want to calculate your alternative minimum tax, you will need a tax software and know what items are included and excluded in the calculation. It’s very complex if you want to do it right. Form 6251 can guide you on how you can calculate your AMT. I will give you a high-level overview of how to calculate alternative minimum tax.
1. We start with our taxable income which is on our Form 1040, line 15.
2. We add back our standard deduction or certain itemized deductions, such as the deduction for state and local taxes, personal exemptions, home equity mortgage interest, percentage of medical expenses, employee business expenses, and other miscellaneous deductions.
3. We also have to add back certain items, such as investment interest, net operating losses, the bargain element on incentive stock options if the stock is not sold within the same calendar year from exercise, tax-exempt interest from private activity bonds, foreign tax credits, passive income and losses, net operating loss deductions. You can get the full list on the IRS website and these items could change so always talk to a qualified tax professional about your unique financial situation.
4. This will give us our alternative minimum tax income (AMTI).
5. The alternative minimum tax income minus the AMT exemption if we are not phased out of the exemption, equals our minimum tax base.
6. The minimum tax base multiple by the AMT rate(s) equals the tentative AMT.
7. The tentative AMT minus the regular income tax on taxable income equals our alternative minimum tax.

How to calculate alternative minimum tax income (AMTI)
Regular taxable income
+ Positive AMT adjustments
- Negative AMT adjustments
+ Tax preferences
—————————
AMTI

How to Calculate alternative minimum tax (AMT)
AMTI
- AMT exemption
—————————
Minimum tax base
X AMT rate
—————————
Tentative AMT
- Regular income tax on taxable income
————————————————————
AMT

You will have a better understanding of the calculation when we go over some examples later in the video.

What is an alternative minimum tax exemption?
An alternative minimum tax (AMT) exemption is an alternative minimum tax income (AMTI) offset. For example, if you are single and your AMTI is $70,000 and the AMT exemption for single taxpayers is $73,600 for 2021. You do not have an AMT liability because $70,000 minus $73,600 is a negative number. If your AMTI is $80,000. $80,000 minus $73,600 equals $6,400. $6,400 is your minimum tax base then you multiply $6,400 by the AMT rate to get the tentative AMT liability. Although you are subject to AMT, it doesn’t mean you have to pay AMT liability because you have to pay the higher amount of the regular income tax liability or the AMT liability. AMT is a parallel tax system of the regular federal income tax. If you owe $100,000 under the regular federal income tax and $120,000 under AMT, you pay $100,000 for regular income tax, and the $20,000 is for the AMT. Thanks to Congress, the AMT exemption amounts are automatically adjusted with inflation.

What are the 2021 AMT exemption amounts?
The 2021 AMT exemption amounts are:
Unmarried individuals (other than surviving spouses) is $73,600
Joint returns or surviving spouses is $114,600
Married individuals filing separate returns is $57,300
Estates and trusts are $25,700
https://www.irs.gov/pub/irs-drop/rp-20-45.pdf

In general, what does “phaseout” mean?
Every year, the IRS publishes phaseout. When your modified adjusted gross income (MAGI) or adjusted gross income (AGI) exceeds a certain phaseout, the tax deductions or tax credits get reduced until you get no tax deductions or tax credits.

In regards to alternative minimum tax, The 2021 AMT exemption begins to phase out and completely phase out are:
● Filing status | Begins to phaseout | Completely phaseout
● Unmarried Individuals (other than Surviving Spouses) | $523,600 | $818,000
● Joint Returns or Surviving Spouses | $1,047,200 | $1,505,600
● Married Individuals Filing Separate Returns | $523,600 | $752,800
● Estates and Trusts | $85,650 | $188,450 [2]

The alternative minimum tax exemption phaseout
25 cents disappear from your exemption for every one dollar above the phaseout. I like to teach by providing an example so let’s look at a single taxpayer. For 2021, Luna is a single taxpayer. The AMT exemption is $73,600 and it begins to phase out at $523,600. She has an alternative minimum tax income of $600,000 for 2021. This example will give Luna some AMT exemption but not all.

$600,000 - $523,600 = $76,400.
$76,400 / 4 = $19,100.
$19,100 - AMT exemption of $73,600 = AMT exemption of $54,500.
AMTI of $600,000 - AMT exemption of $54,500 = Minimum tax base of $545,500.

Why you should not go over the annual alternative minimum tax income phaseout amount:
The alternative minimum tax exemption can be reduced to zero for high-income earners. Let’s do another example by assuming Luna has an alternative minimum tax income of $818,000 for 2021.

$818,000 - $523,600 = $294,400.
$294,400 / 4 = $73,600.
$73,600 - AMT exemption of $73,600 = AMT exemption of $0.

We deduct Luna’s AMTI of $818,000 from $523,600 because that is the amount the phaseout begins. We divided by 4 because 25 cents disappear for every one dollar above the phaseout. Thus, Lune will not receive an AMT exemption because her alternative minimum tax income is too high. She is completely phased out. Let’s take it another step further by adding the tax rates to get the tentative AMT liability.

$199,900 X 26% = $51,974.
($818,000 - $199,900) X 28% = $173,068.
$51,974 + $173,068 = $225,042.
$225,042 is the tentative AMT liability.

What are the alternative minimum tax rates for 2021?

For 2021, the 26% tax rate applies to AMTI up to:
● Unmarried individuals (other than surviving spouses) is $199,900
● Joint returns or surviving spouses is $199,900
● Married individuals filing separate returns is $99,950
● Estates and trusts is $199,900

For 2021, the 28% tax rate applies to AMTI over:
● Unmarried individuals (other than surviving spouses) is $199,900
● Joint returns or surviving spouses is $199,900
● Married individuals filing separate returns is $99,950
● Estates and trusts is $199,900 [2]

Let’s go over some examples. The IRS has examples on its website. I am going to make little changes for easy understanding and to be up to date. The AMT exemption amount for 2018 is $109,400 for married filing jointly which is shown on page 10 on the IRS website. In 2018, Mr. and Mrs. Luna have an alternative minimum tax base of $312,000. What is their tentative alternative minimum tax? [3]

The wrong way to solve this problem is:
$312,000 X 26% = $81,120 or $312,000 X 28% = $87,360.

The correct way to solve this problem is:
$191,500 (2018 AMT limit for 26% tax rate) X 26% = $49,790.
($312,000 - $191,500) X 28% = $33,740.
$49,790 + $33,740 = $83,530.

What happens to the 2018 AMT exemption of $109,400? The AMTI minus the AMT exemption equals the minimum tax base. The minimum tax base times the AMT rates equal the tentative alternative minimum tax. Thus, the AMT exemption was calculated to get the minimum tax base.

What did we learn? The AMT rates work like the regular federal income tax rates. They are both on a progressive tax system. The AMT exemption amount for 2021 is $114,600 for married filing jointly taxpayers. In 2021, Mr. and Mrs. Luna have a minimum tax base of $312,000. What is their tentative alternative minimum tax?

The 2021 AMT rate of 28% applies to the excess of $199,900 for married filing jointly taxpayers.
$199,900 (2021 AMT limit for 26% tax rate) X 26% = $51,974.
($312,000 - $199,900) X 28% = $31,388.
$51,974 + $31,388 = $83,362.

In 2021, Mr. and Mrs. Luna have an alternative minimum tax income of $312,000. What is their tentative alternative minimum tax? The alternative minimum tax income of $312,000 minus the 2021 AMT exemption amount of $114,600 for married filing jointly taxpayers equals the minimum tax base of $197,400. The $197,400 is below the 2021 AMT rate of 28% applied to the excess of $199,900 for married filing jointly taxpayers. The minimum tax base of $197,400 times the AMT tax rate of 26% equals the tentative AMT of $51,324.

AMTI of $312,000
- AMT exemption of $114,600
—————————
Minimum tax base of $197,400
X AMT rate of 26%
—————————
Tentative AMT of $51,324

Luna is a single taxpayer for 2021 with a taxable income of $50,000 and a positive AMT adjustment of $5,000 for AMT purposes. Her regular income tax liability is $13,800. What is Luna’s total tax liability?
How to calculate alternative minimum tax income (AMTI)
Regular taxable income of $50,000
+ Positive AMT adjustment of $5,000
—————————
= AMTI of $55,000

AMTI of $55,000 is less than the AMT exemption of $73,600. Thus, Luna’s total tax liability is her regular income tax liability of $13,800.

Luna is a single taxpayer for 2021 with a taxable income of $100,000 and a positive AMT adjustment of $65,000 for AMT purposes. Her regular income tax liability is $13,800. What is Luna’s total tax liability?
How to calculate alternative minimum tax income (AMTI)
Regular taxable income of $100,000
+ Positive AMT adjustment of $65,000
—————————
= AMTI of $165,000

How to Calculate alternative minimum tax (AMT)
AMTI of $165,000
- AMT exemption of $73,600
—————————
Minimum tax base of $91,400
X AMT rate of 26%
—————————
Tentative AMT of $23,764
- Regular income tax liability of $13,800
—————————————————————
= AMT of $9,964

Luna’s total tax liability is $23,764.

What happens when you exercise incentive stock options (ISOs)?
You exercise ISOs with after-tax dollars. When you exercise ISOs and do not sell the employer stock within the same calendar year, the bargain element is a positive AMT adjustment. Other positive AMT adjustments are the standard deduction or certain itemized deductions, such as state and local income taxes and property taxes. You can visit the IRS website to get the full list of positive AMT adjustments. You can start by visiting irs.gov/Form6251 to learn more. When you sell the stock, the difference between the sale price and the exercise price is a long-term capital gain if it’s a qualifying disposition. That amount is a negative AMT adjustment.

If you exercise the ISOs then sell the employer stock within the same calendar year, you don’t have to worry about AMT because the difference between the sale price and the exercise price is taxed at ordinary income tax rates. If this sounds confusing to you, I recommend you watch my video on What You Need To Know About Incentive Stock Options (ISOs). You need to know how ISOs work and the terms used relate to ISOs.

Form 6251
Form 6251 gives us a lot of intelligence. If we want to pay the least amount of overall taxes, we need to understand Form 6251 because it gives us a list of items that are included in the AMT calculation to get to our AMTI. From line 2a to line 3, you want to know if the item is a positive AMT adjustment, negative AMT adjustment, or tax preference item. Once you figure that out, you want to know if it’s a deferral item or an exclusion item.

Where does the bargain element amount go on the tax return? Form 6251, Line 2i, Exercise of incentive stock options (excess of AMT income over regular tax income).

AMT Credit
When we exercise ISOs and pay AMT on the bargain element, the difference between the exercise price and the fair market value, what happens to the tax payment? The tax payment is an AMT credit and may be used against regular tax in future years. “Am I Eligible for a Tax Credit? If you're not liable for AMT this year, but you paid AMT in one or more previous years, you may be eligible to take a special minimum tax credit against your regular tax this year. If eligible, you should complete and attach Form 8801, Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts to claim the minimum tax credit.” [4]

Here is what Form 8801 looks like.
https://www.irs.gov/pub/irs-pdf/f8801.pdf

Here are the instructions for Form 8801.
https://www.irs.gov/pub/irs-pdf/i8801.pdf

This is from Quizlet. “A taxpayer is paying alternative minimum tax this year. The AMT is primarily due to timing differences, resulting in the creation of a minimum tax credit. The taxpayer will apply the minimum tax credit against a future year's regular tax liability when regular tax exceeds the tentative minimum tax.” An AMT credit can be carried forward into future years until it’s exhausted. An AMT credit cannot be carried backward for previous years. You might not use all of your AMT credit or it will take a very long time to get all of your AMT credit to offset your regular tax. [5]

Using AMT Credit
“After a taxpayer has paid AMT, a credit is allowed against regular tax in future years for the amount of AMT. The credit for individuals is generally limited to the amount of AMT generated by deferral items (e.g. exercise of incentive stock options), as opposed to exclusion items (e.g. state and local taxes). This credit is limited so that regular tax is not reduced below AMT for the year.” [1]

What did we learn? AMT credit can offset regular tax when the regular tax is greater than AMT. Another way to say this is that AMT credit can offset regular tax when we are not subject to AMT. Once we know we can use the AMT credit to offset the regular tax, there is a limit on how much AMT credit we can use because the regular tax liability cannot be below the AMT liability. That’s why qualified tax professionals say it takes a very long time to use all of the AMT credit from a large AMT payment from exercised ISOs.

Why do you get taxed on the bargain element if you are subject to AMT?
The IRS assumes you will make a profit when you sell the stock. Thus, they want you to prepay the tax even though you did not sell the stock.

I am currently not subject to AMT liability. How do I know if I am subjected to AMT liability when I exercise my ISOs?
You can use the estimated tax calculator then minus $10-20K from the estimated bargain element to be on the safe side or ask a tax professional to run the numbers for you. Another option you can do is exercise a few ISOs this year and see if you are subject to AMT. If you are not subject to AMT after you exercise your ISOs, ask your tax professional “how much bargain element can I have next year before I am subjected to AMT?” From there, minus $10k-$20k to be on the safe side. If you have to pay AMT liability this year, you only pay a small amount because you only exercised a few ISOs last year. Thus, using up all the AMT credit is easier than having a large amount of AMT credit because you exercise a lot of ISOs. You should know that calculating AMT is complex and you are only subject to AMT if your AMT liability is higher than your regular tax liability.

Understanding the relationship between alternative minimum tax and incentive stock options.
If we want to understand alternative minimum tax, we need to understand Form 6251 line by line. We are not going to go over Form 6251 line by line, but we will talk about the relationship between Form 6251 and incentive stock options. I like to teach by providing examples and TurboTax has really good examples on their website, so we are going to look at them together.

We exercise 100 incentive stock options (ISOs) at $3 per share and the stock is trading at $33 per share.
(The fair market value of the stock is $33 - exercise price of $3 ) X 100 ISOs = $3,000 is the bargain element.
On Form 6251, Line 15 is the bargain element of $3,000.
The exercise price of $3 per share times 100 ISOs equals $300 is the cost basis in the stock for regular tax purposes.
The fair market value of $33 per share times 100 ISOs equals $3,300 is the cost basis in the stock for alternative minimum tax purposes.

You have 2 cost bases in the stock:
- If you are not subject to AMT, that means you did not pay AMT on the bargain element, your cost basis is $3 per share. When you later sell the stock, you pay taxes on the difference between the cost basis which is $3 per share, and the sale price.
- If you are subjected to AMT and paid AMT on the bargain element, your cost basis is $33 per share. When you later sell the stock, gain or loss is based on the cost basis of $33 per share and the sale price. There is an exception to this rule where if you sell the stock within the same calendar year, the difference will be taxed at ordinary income tax rates. [6]

Avoiding AMT
If we want to avoid AMT, all we need to do is exercise the ISOs and sell them within the same calendar year. For example, we exercise the ISOs at $3 per share and the stock fair market value is $33 per share. A couple of months later, the stock price decreased to $20 per share and we sold the stock at $20 per share. Because we exercised the ISOs and sold the stock within the same calendar year, we paid tax on $17 per share ($20 - $3) at ordinary income tax rates. The stock fair market value at exercise is irrelevant because we exercised the ISOs and sold the stock within the same calendar year.

Does California have AMT?
Yes, I live in California and California has an alternative minimum tax. You can visit www.ftb.ca.gov to learn more about California AMT rates. Because we cannot deduct state and local taxes under AMT, investors who live in states that have high-income tax rates are more likely to be subject to AMT compared to investors who live in states that have low-income tax rates.

AMT and incentive stock options in non-public companies
Before investors exercise their ISOs in non-public companies, they need to know how their ISOs work, the tax liability, and the risks associated with non-public companies’ stock. To avoid AMT, the investor can exercise the ISOs and sell them within the same calendar year, but the two biggest obstacles are tradable and available to trade.
● Tradable. Is there a market for the stock to be traded after the investor exercised the ISOs?
● Available to trade. Are there lock-up periods where the investor exercised the ISOs but cannot sell them because they are in a lock-up period?

We know that the bargain element is subject to AMT. The IRS will calculate the employer's stock fair market value based on the information the company provided to the IRS. If the investor exercised ISOs and had to pay AMT, they should be aware of many risks. The risk the stock price will decrease, the risk they cannot sell the employer stock because they are in a long lock-up period or other restrictions. They also should consider the opportunity cost of the AMT payment. Instead of using their after-tax dollars to exercise the ISOs, they could use that money to invest in a diversified portfolio.

Please note that this material is for educational use only. Tax laws are complex, there are exceptions to the rules, and it’s constantly changing so don’t do it alone. Be sure to talk to a qualified professional before making an informed decision. I hope you enjoyed this video and thank you for watching it. Until next time. This is Tan, your trusted advisor.

REFERENCES

1. Alternative minimum tax - https://en.wikipedia.org/wiki/Alternative_minimum_tax
2. Tax Rate Tables - https://www.irs.gov/pub/irs-drop/rp-20-45.pdf
3. Instructions for Form 6251 - https://www.irs.gov/pub/irs-prior/i6251--2018.pdf
4. Topic No. 556 Alternative Minimum Tax - https://www.irs.gov/taxtopics/tc556
5. Quizlet - https://quizlet.com/390537741/ch14-questions-flash-cards/#
6. Alternative Minimum Tax: Common Questions - https://turbotax.intuit.com/tax-tips/irs-tax-return/alternative-minimum-tax-common-questions/L50YotKHP

Resources:
● What You Need To Know About Incentive Stock Options (ISOs) - https://tanphan.com/blog/incentive-stock-options-iso
● Alternative Minimum Tax (AMT) Credit Examples - https://tanphan.com/blog/alternative-minimum-tax-amt-credit-examples
● IRS 2022 Federal Income Tax Brackets & Rates - https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022
● IRS 2021 Federal Income Tax Brackets & Rates - https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2021
● TurboTax - https://turbotax.intuit.com/tax-tips/irs-tax-return/alternative-minimum-tax-common-questions/L50YotKHP
● Instructions for Form 6251, Alternative Minimum Tax—Individuals - https://www.irs.gov/instructions/i6251
● Form 6251, Alternative Minimum Tax—Individuals - https://www.irs.gov/pub/irs-pdf/f6251.pdf
● Instructions for Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts - https://www.irs.gov/pub/irs-pdf/i8801.pdf
● Form 8801, Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts - https://www.irs.gov/pub/irs-pdf/f8801.pdf
● Line-by-Line Help Free File Fillable Forms Instructions - https://www.irs.gov/e-file-providers/line-by-line-instructions-free-file-fillable-forms
● AMT calculator - https://www.esofund.com/blog/amt-tax
● Income Tax Quick Estimator - https://www.tax-brackets.org/federaltaxtable
● Topic No. 409 Capital Gains and Losses - https://www.irs.gov/taxtopics/tc409
● State of California Franchise Tax Board - https://www.ftb.ca.gov

States With Individual Alternative Minimum Tax (AMT):
● States that have individual alternative minimum tax (AMT) are California, Colorado, Connecticut, Iowa, and Minnesota.
● States that do not have individual alternative minimum tax (AMT) are Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
https://taxfoundation.org/state-individual-alternative-minimum-tax-2021

Underpayment of Estimated Tax by Individuals Penalty:
● “The Underpayment of Estimated Tax by Individuals Penalty applies to individuals, estates and trusts if you don't pay enough estimated tax on your income or you pay it late. The penalty may apply even if we owe you a refund.”
● “We charge interest on penalties.”
● “Avoid a Penalty. You may avoid the Underpayment of Estimated Tax by Individuals Penalty if:
- Your filed tax return shows you owe less than $1,000 or
- You paid at least 90% of the tax shown on the return for the taxable year or
- 100% of the tax shown on the return for the prior year, whichever amount is less.”
● There are special rules so please talk to a tax professional before making an informed decision on your estimated tax payments to the federal government and state if applicable.
https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty

Topic No. 306 Penalty for Underpayment of Estimated Tax
“The United States income tax system is a pay-as-you-go tax system… Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.”
https://www.irs.gov/taxtopics/tc306

“When does the IRS Charge Interest? [IRS] charge interest when a taxpayer has an unpaid liability comprised of tax, penalties, additions to tax, or interest. In general, [IRS] charge interest on underpayments starting on the due date of the amount you owe and will continue to accrue until the balance is paid in full.”
https://www.irs.gov/payments/interest

Alternative Minimum Tax (AMT) Updated for 2022

“The Alternative Minimum Tax exemption amount for tax year 2022 is $75,900 and begins to phase out at $539,900 ($118,100 for married couples filing jointly for whom the exemption begins to phase out at $1,079,800).”
www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2022

“Exemption Amounts for Alternative Minimum Tax. For taxable years beginning in 2022, the exemption amounts under § 55(d)(1) are:
● Joint Returns or Surviving Spouses | $118,100
● Unmarried Individuals (other than Surviving Spouses) | $75,900
● Married Individuals Filing Separate Returns | $59,050
● Estates and Trusts | $26,500

For taxable years beginning in 2022, under § 55(b)(1), the excess taxable income above which the 28 percent tax rate applies is:
● Married Individuals Filing Separate Returns | $103,050
● Joint Returns, Unmarried Individuals (other than surviving spouses), and Estates and Trusts | $206,100

Alternative Minimum Tax (AMT) Updated for 2023

“The Alternative Minimum Tax exemption amount for tax year 2023 is $81,300 and begins to phase out at $578,150 ($126,500 for married couples filing jointly for whom the exemption begins to phase out at $1,156,300).”
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2023

Exemption Amounts for Alternative Minimum Tax. For taxable years beginning in 2023, the exemption amounts under § 55(d)(1) are:
● Joint Returns or Surviving Spouses | $126,500
● Unmarried Individuals (other than Surviving Spouses) | $81,300
● Married Individuals Filing Separate Returns | $63,250
● Estates and Trusts | $28,400

For taxable years beginning in 2023, under § 55(b)(1), the excess taxable income above which the 28 percent tax rate applies is:
● Married Individuals Filing Separate Returns | $110,350
● All Other Taxpayers | $220,700

For taxable years beginning in 2023, the amounts used under § 55(d)(2) to determine the phaseout of the exemption amounts are:
● Filing status | Threshold Phaseout amount | Complete Phaseout amount
● Joint Returns or Surviving Spouses | $1,156,300 | $1,662,300
● Unmarried Individuals (other than Surviving Spouses) | $578,150 | $903,350
● Married Individuals Filing Separate | $578,150 | $831,150
● Returns Estates and Trusts | $94,600 | $208,200
https://www.irs.gov/pub/irs-drop/rp-22-38.pdf

Alternative Minimum Tax (AMT) Updated for 2024

“The Alternative Minimum Tax exemption amount for tax year 2024 is $85,700 and begins to phase out at $609,350 ($133,300 for married couples filing jointly for whom the exemption begins to phase out at $1,218,700).“
https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024

Exemption Amounts for Alternative Minimum Tax. For taxable years beginning in 2024, the exemption amounts under § 55(d)(1) are:
● Joint Returns or Surviving Spouses | $133,300
● Unmarried Individuals (other than Surviving Spouses) | $85,700
● Married Individuals Filing Separate Returns | $66,650
● Estates and Trusts | $29,900

For taxable years beginning in 2024, under § 55(b)(1), the excess taxable income above which the 28 percent tax rate applies is:
● Married Individuals Filing Separate Returns | $116,300
● All Other Taxpayers | $232,600

For taxable years beginning in 2024, the amounts used under § 55(d)(2) to determine the phaseout of the exemption amounts are:
● Filing status | Threshold Phaseout amount | Complete Phaseout amount
● Joint Returns or Surviving Spouses | $1,218,700 | $1,751,900
● Unmarried Individuals (other than Surviving Spouses) | $609,350 | $952,150
● Married Individuals Filing Separate | $609,350 | $875,950
● Returns Estates and Trusts | $99,700 | $219,300
https://www.irs.gov/pub/irs-drop/rp-23-34.pdf