What Is Alternative Minimum Taxable Income?

Alternative minimum taxable income (AMTI) is the version of your income used to calculate whether you owe the Alternative Minimum Tax (AMT). To arrive at AMTI, you start with your regular taxable income and then add back certain deductions and preferences that reduce regular tax but not the AMT — including the state and local tax deduction, personal exemptions, certain accelerated depreciation, and the spread on incentive stock option exercises. After adding back these items, you subtract the AMT exemption ($85,700 for single filers and $133,300 for married couples in 2024), and apply the AMT rates of 26% and 28% to the remaining income. If the resulting AMT exceeds your regular income tax liability, you pay the difference as additional tax. Because of exemption amounts and phase-outs, the AMT now affects far fewer taxpayers than it did before 2018 — primarily those with very high incomes, large deductions from incentive stock options, or significant itemized deductions.