Glossary term
Alternative Minimum Tax (AMT)
A parallel tax computed to ensure high-income taxpayers pay a minimum amount of federal tax.
Related terms
1
Jurisdictions
us
Definition
The AMT is computed by adding back certain preferences and adjustments to regular taxable income to arrive at alternative minimum taxable income (AMTI). After the AMT exemption is subtracted, AMTI is taxed at 26 or 28 percent. TCJA significantly raised the exemption and phaseout thresholds, reducing the number of taxpayers subject to AMT through 2025.
Examples
- A high-income taxpayer with substantial ISO exercises may trigger AMT on the bargain element.
Related terms
Translations
Citations
Related citations
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
Primary sources
- IRS Form 6251 instructionsVerified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.