What is the AMT rate in the US?

The AMT has two distinct tax rates that apply to different income levels. For the 2023 tax year, the first tier of the AMT applies a 26 percent tax rate to income exceeding the exemption limit up to a certain threshold.

The exemption for singles and heads of household has significantly increased over the years, from $54,300 in 2017 to $81,300 in 2023. This adjustment reflects the changing economic landscape and aims to provide greater tax relief for individuals.

The Alternative Minimum Tax (AMT) is a separate tax system designed to ensure that high-income individuals pay at least a minimum amount of tax, regardless of deductions and exemptions. It operates in parallel with the regular income tax system.

Specifically, the first $220,700 of income above the $81,300 exemption for singles and heads of household is subject to the 26 percent AMT rate. This means that individuals earning up to $302,000 (exemption + threshold) will be taxed at this rate for the excess income.

Beyond this threshold, a higher tax rate of 28 percent applies to any additional income. This ensures that those with significantly higher incomes contribute a greater share to the tax system.