The alternative minimum tax exemption will be $93,000 for unmarried filers and $144,700 for married couples filing jointly in 2027, the IRS said Nov. 5. The exemption begins to phase out at $515,950 and $1,031,900. Each figure is higher than the 2026 amounts of $90,100 and $140,200, with phase-outs that began at $500,000 and $1,000,000.
The alternative minimum tax is a second set of rules that limits how much a high-income filer can reduce a bill through deductions and credits. The exemption is the amount of income the AMT leaves untouched, and the phase-out is the point where that protection starts to shrink. Both are measured in alternative minimum taxable income, a different yardstick from the taxable income used for ordinary brackets.
Stay ahead of government payment news: Miss an enrollment or claim deadline and the money can be gone. Join the Retirement Money Brief and we’ll send you our 2026 Government Check Reality Tracker as a welcome gift.
Get the Brief + the check tracker →
We may earn a commission from links on this page.
What does the phase-out do to the exemption?
Above the starting line, the exemption shrinks and eventually disappears. Revenue Procedure 2026-35, the technical guidance behind the announcement, puts the point where it is gone at $701,950 for unmarried filers and $1,321,300 for married couples filing jointly. Under the 2026 procedure those points were $680,200 and $1,280,400.
The numbers show how fast it shrinks. The unmarried exemption of $93,000 is wiped out over the $186,000 between $515,950 and $701,950, and the joint exemption of $144,700 over the $289,400 between $1,031,900 and $1,321,300. Both work out to 50 cents of exemption lost for each dollar above the starting line.
An example shows what the 2027 change does. An unmarried filer with $600,000 of alternative minimum taxable income loses $42,025 of exemption, half of the $84,050 above the starting line, and keeps $50,975 for 2027. The same $600,000 under the 2026 numbers leaves $40,100. A joint filer with $1.1 million keeps $110,650 for 2027 against $90,200 for 2026.
The zone where the exemption shrinks also grew wider. For unmarried filers it spans $186,000 in 2027, compared with $180,200 in 2026, and for joint filers it spans $289,400 against $280,400. Because each dollar of income in that zone also removes 50 cents of exemption, the 28% rate acts like 42% there by that arithmetic, 28% applied to the dollar and to the extra 50 cents.
How much did each AMT figure move?
Every number in the AMT table rises, most by about 3.2 percent. For unmarried filers the exemption is up $2,900, and for joint filers it is up $4,500. The phase-out start rises $15,950 for unmarried filers and $31,900 for joint filers.
The same table covers other filers, and the full phase-out points rise too. For married people filing separately it is gone at $660,650, up from $640,200, and for estates and trusts at $173,200, up from $167,600. Married people filing separately get a $72,350 exemption for 2027, up from $70,100, and their phase-out begins at $515,950, up from $500,000. Estates and trusts have a $32,500 exemption, up from $31,400, which starts to phase out at $108,200 rather than $104,800.
The phase-outs also sit in different places against the ordinary rate schedule. The 37% rate begins at $661,375 for single filers and $793,650 for joint filers. For unmarried filers the exemption starts to shrink $145,425 below that line, while for joint filers it starts $238,250 above it.
Spouses who file separately face the same $515,950 starting line as unmarried filers but with a smaller exemption of $72,350. A married person filing separately with $600,000 of alternative minimum taxable income loses $42,025 of it and keeps $30,325 for 2027. Under the 2026 numbers the same income would leave $20,100, which is $10,225 less.
Where does the 28% AMT rate begin?
The revenue procedure also moves the line where the higher AMT rate of 28% takes over. For 2027 it applies above $252,500 for most taxpayers and above $126,250 for married people filing separately, up from $244,500 and $122,250 for 2026.
The 28% line is separate from the exemption. The exemption is the income the AMT ignores, while the 28% line marks where the AMT’s higher rate begins on the income that remains.
Who needs to watch these lines?
Filers whose alternative minimum taxable income stays under $515,950 for unmarried returns or $1,031,900 for joint returns keep the full exemption. The phase-out only matters for those above the starting lines, and it matters more the higher they go.
Crossing a line does not by itself mean a bill. A filer owes the AMT only when the AMT calculation comes out higher than the regular tax, and the exemption is one input to that comparison. Revenue Procedure 2026-35 applies to taxable years beginning in 2027, and the exemption and phase-out lines are the figures a return preparer will need.
The 2027 amounts are for income earned next year and generally apply to returns filed in 2028. The return filed this coming spring uses the 2026 amounts. The announcement covers almost 70 provisions, so the AMT table is one of many that move at once.
Do the 2027 tax lines change your plan?
A tax line that moves by a few thousand dollars changes little by itself, but a year with an unusual spike in income can cross several lines at once, and the AMT phase-out is one of them. A spike like that is easier to plan around when the lines are known before the year starts.
The AMT is a high-income rule, so the turn here is plain: the Keep-It Starter Bundle is built for retirees, and it covers the tax lines that set a retiree’s bill. Its nine guides run 95 pages in one download, and the tax section walks through the senior deduction, RMDs, QCDs and the Roth window.
Get the nine-guide bundle, with its retiree tax-bill guide →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
