You paid AMT on an ISO exercise — Form 8801 carries that as a Minimum Tax Credit (MTC). Each future year your regular tax exceeds tentative minimum tax, you recover some of it. This calculator projects when the balance hits $0.
Tax year 2026 · Last updated May 11, 2026
Projected recovery
5 years to full recovery
Starting balance: $35,000. Total credit applied: $34,999.
| Year | Income | Regular tax | TMT | Credit applied | Balance after |
|---|---|---|---|---|---|
| 2026 | $220,000 | $36,106 | $27,543 | $8,563 | $26,437 |
| 2027 | $228,800 | $38,218 | $29,831 | $8,387 | $18,049 |
| 2028 | $237,952 | $40,414 | $32,210 | $8,204 | $9,845 |
| 2029 | $247,470 | $43,157 | $34,685 | $8,472 | $1,373 |
| 2030 | $257,369 | $46,324 | $37,258 | $1,373 | $0 |
| 2031 | $267,664 | $49,619 | $39,935 | — | $0 |
| 2032 | $278,370 | $53,045 | $42,719 | — | $0 |
| 2033 | $289,505 | $56,608 | $45,614 | — | $0 |
| 2034 | $301,085 | $60,452 | $48,625 | — | $0 |
| 2035 | $313,129 | $64,668 | $51,756 | — | $0 |
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Per IRC §53, when you pay Alternative Minimum Tax in a year, the portion attributable to "deferral" preference items (like an ISO exercise that becomes ordinary income later when sold) generates a Minimum Tax Credit (MTC). The MTC carries forward indefinitely and offsets your regular tax in future years where regular tax exceeds tentative minimum tax. It is reported on IRS Form 8801.
In any year where regular federal income tax exceeds tentative minimum tax (TMT). The amount you can apply is the difference between the two, capped at your remaining MTC balance. If TMT >= regular tax that year (you would otherwise be in AMT), you cannot apply credit — you carry the balance forward.
IRC §53(d) makes the AMT credit carryforward indefinite — there is no expiration. However, "indefinite" is not "guaranteed to be recovered." If your future income is too low to make regular tax exceed TMT, the credit sits unused.
Two main scenarios: (1) Your future income drops or stays flat and AMT exemption phaseouts keep TMT close to regular tax. (2) You retire and live on capital gains / qualified dividends, which are taxed favorably under regular but get the full TMT treatment — TMT can stay above regular tax for years.
The 100% refundable provision (former IRC §53(e)) was repealed by the Tax Cuts and Jobs Act of 2017. Today the AMT credit is non-refundable — it only offsets actual federal tax liability. The repealed refundable version applied to long-term unused credits from pre-2008 exercises and is no longer relevant for new credits.
No. v1 models federal MTC (Form 8801) only. California, New York, Massachusetts, and Minnesota have their own AMT systems with separate credit tracking. CA in particular requires Schedule P (540). Consult a CPA for state-credit interaction.
Yes — significantly. Each new ISO exercise triggers fresh AMT preference, generates new MTC (good), but also pushes you back into AMT for that year, pausing recovery on existing balance (bad). Run the Mathstub ISO/AMT calculator first to size the new exposure, then re-run this scheduler with the new combined balance.
TMT is what AMT would be in isolation: max(0, AMTI − exemption-after-phaseout) × 26%/28%. It is computed on Form 6251. AMT itself = max(0, TMT − regular tax). When regular tax > TMT, AMT is zero, and the difference is what the MTC can offset.
No — it is a planning estimate. Real recovery depends on your actual future income, the full set of AMT preference items in future years (depreciation, oil/gas, certain bonds), and whether tax law changes (the TCJA AMT provisions sunset in 2025 unless extended). For real-money decisions, consult a CPA who specializes in equity comp and AMT planning.