AMT Calculator Calculator
Estimate your Alternative Minimum Tax (AMT) liability from ISO stock option exercises before you file. See the full AMT curve to find the safe exercise limit at your income level.
AMT owed
$718
Tentative min tax $55,718 exceeds regular tax $55,000 by $718.
AMTI (before exemption)
$300,000
AMT exemption
$85,700
Taxable AMTI
$214,300
Tentative min tax
$55,718
AMT breakeven ISO gain
$47,217
AMT triggered
Yes
- 2024 AMT parameters: Exemption $85,700 (single) / $133,300 (married filing jointly). Phase-out starts at $609,350 / $1,218,700. Rates: 26% on first $232,600 of AMTI, 28% above.
- Regular tax owed is provided by you, not computed here. Use your tax software's estimate or your prior-year tax for a rough starting point.
- State AMT (applicable in a small number of states) and the SALT add-back under the federal AMT are not modeled.
- The AMT credit: when you pay AMT in a year due to ISO exercises, you earn an AMT credit that can be used to reduce regular tax in future years when regular tax exceeds the tentative minimum tax (typically when you sell the shares). This is a meaningful offset that is not projected here.
- This calculator is for estimation purposes only. Consult a tax professional before making ISO exercise decisions.
What is AMT and why it exists
The Alternative Minimum Tax (AMT) is a parallel tax system designed to ensure that high-income earners and people with large deductions pay a minimum amount of federal tax. You calculate your taxes under both the regular system and the AMT system, then pay whichever is higher.
For most employees, the AMT is triggered by exercising Incentive Stock Options (ISOs). When you exercise ISOs, the "spread" (difference between the exercise price and fair market value) is added to your income for AMT purposes — even though it's not taxable for regular income tax. This means you can owe AMT before you've actually sold any shares or received any cash from the exercise.
Why it matters to your money
AMT is one of the most painful surprises for tech employees. You exercise your stock options expecting a windfall, only to discover you owe thousands in AMT before selling a single share. This calculator lets you model the AMT curve at your income level and find the maximum ISO exercise that keeps you clear of AMT — helping you plan your exercises around tax season.
Read the full explainer on capital gains tax for broader context on how stock-related taxes work, including the difference between ISOs and NSOs, capital gains rates, and the disqualifying disposition rule.
Rules of thumb
- AMT exemption phases out at high income: For 2025, the AMT exemption starts phasing out at $609,350 (single) / $1,218,700 (married). Above this threshold, the AMT exemption is eliminated and you're fully subject to the 26% or 28% AMT rate.
- ISO exercises are the #1 AMT trigger: If you have ISOs, model the AMT impact before exercising. Consider exercising in chunks that stay below the AMT trigger threshold.
- AMT paid can be credited later: If you pay AMT in one year, you may be able to claim an AMT credit in future years when your regular tax exceeds your AMT — it's not a permanent penalty, just a timing difference.
Frequently asked questions
- What is the Alternative Minimum Tax (AMT)?
- The AMT is a parallel tax system designed to ensure high earners pay a minimum amount of tax regardless of deductions. You calculate your taxes under both the regular system and the AMT system, then pay whichever is higher.
- Who typically owes AMT?
- The AMT most commonly affects: high-income earners with many deductions, those exercising incentive stock options (ISOs), people in high-tax states (since state taxes aren't deductible under AMT), and taxpayers with large capital gains.
- How do ISO stock option exercises trigger AMT?
- When you exercise incentive stock options, the "spread" (difference between exercise price and fair market value) is an AMT preference item — it increases your AMT income even though it's not regular taxable income until you sell the shares.