Who has to worry about the Alternative Minimum Tax (AMT) in 2026?

The AMT is a parallel tax system that disallows certain deductions and requires you to pay the higher of the regular tax or the AMT. After the 2017 tax law sharply raised the AMT exemption and phaseout thresholds, far fewer households were caught, and recent legislation has kept the exemption high. Today AMT most commonly hits people who exercise incentive stock options (ISOs) and hold the shares, those with very large state-and-local or miscellaneous adjustments, and some high earners with specific deductions. If you exercise ISOs, the paper 'bargain element' can create AMT even without selling. Because exemption amounts and phaseouts are inflation-adjusted annually, verify current figures on irs.gov. If you have ISOs, run the numbers before exercising — WealthSerene's tax-strategies tool at wealthserene.com/tools/tax-strategies can help you frame the decision.