What triggers the Alternative Minimum Tax (AMT) for individual taxpayers?

The AMT is a parallel tax system with its own exemptions, rates (26% and 28%), and rules that add back certain 'preference items' like accelerated depreciation, large state and local tax deductions, and the spread on incentive stock option (ISO) exercises. For 2025, the AMT exemption is $88,100 for single filers and $137,000 for married filing jointly, phasing out at higher income levels. If your AMT liability exceeds your regular tax liability, you pay the difference as AMT.