AMT Exemption for 2027 (Projected)

Our projection is $92,100 for a single filer or head of household and $143,400 on a joint return, against confirmed 2026 amounts of $90,100 and $140,200. Separate filers get exactly half the joint figure. These are ustax.tools estimates, not announced numbers — the binding table arrives with the autumn 2026 revenue procedure.

A projected $511,350 of alternative minimum taxable income for single filers and $1,022,700 on a joint return, versus $500,000 and $1,000,000 in 2026. Above those points the exemption shrinks by 50 cents for every extra dollar, so it is fully gone by roughly $695,550 single or $1,309,500 joint. The steep withdrawal rate is why the effective marginal rate in this band is markedly higher than the headline 26% or 28%.

Legislation, not inflation. OBBBA (P.L. 119-21, §70107) rewrote IRC §55(d)(4), pulling the thresholds down from their TCJA levels toward pre-TCJA territory and simultaneously doubling the withdrawal rate from 25 cents to 50 cents on the dollar. That combination is what makes the phase-out band bite so much harder from 2026 onward, and it is a one-time statutory reset — this page deliberately does not extrapolate it into 2027.

Yes. The indexing clause at §55(d)(4)(B)(i) applies to the joint-return threshold only "in the case of any taxable year beginning in a calendar year after 2018 (2026, in the case of the $1,000,000 amount)", using 2025 as the base year. So 2026 is the statutory anchor and 2027 is the first ordinary inflation step. The single, head-of-household and separate thresholds are defined as half the joint amount, so they follow it automatically rather than being indexed on their own.

At a projected $250,000 of AMT base above the exemption, up from $244,500 in 2026 — or $125,000 for married filing separately, which is half. Below that breakpoint the rate is 26%. Both rates are statutory and never move; only the breakpoint between them is indexed. Note this figure is measured after the exemption has been subtracted, not against gross income.

They do, and the IRS publishes it in the same table as the individual amounts, which is why it appears in the table above. It is much smaller and its phase-out begins at a far lower level, so trusts reach full withdrawal at incomes that would barely register for an individual. That compression is one reason AMT exposure inside a trust is worth checking separately rather than assumed away.

Exercising incentive stock options and holding the shares past year-end is the dominant cause — the bargain element is invisible for regular tax but fully counted for AMT. Large state and local tax deductions used to be a common trigger and matter less now, while private-activity bond interest and certain depreciation timing differences still contribute. If ISOs are in the picture, run the exercise through the AMT tools rather than relying on the exemption to absorb it.

Late 2026 is when Treasury normally settles them. If you are timing an incentive stock option exercise across the year boundary, that publication date is worth marking, because both the shield and the band it sits in shift at once. Our estimates are replaced when it lands.