How the 2026 federal AMT screening estimate works
Canada's Alternative Minimum Tax is a parallel federal calculation. You generally pay regular federal tax or AMT, whichever is higher. AMT uses a broader income base and restricts some deductions and credits, so it is most relevant when a return contains large capital gains, stock-option deductions, losses, or other preferential items.
Why the 2026 rules are different
The reformed rules have applied since the 2024 tax year. They use a 20.5% rate, include most capital gains at 100% for AMT, and allow only part of many deductions and non-refundable credits. The exemption follows the indexed start of the fourth federal income-tax bracket: $181,440 for 2026.
What the $181,440 exemption means
The exemption reduces adjusted taxable income before the 20.5% rate is applied. Crossing $181,440 does not automatically mean that you owe AMT: the completed AMT calculation still has to exceed regular federal tax. Province or territory tax, loss history, donation credits, exemptions, and the detailed adjustments on Form T691 can materially change the result.
Capital-gain adjustment
Regular federal tax currently includes 50% of a capital gain in taxable income. The AMT calculation generally includes 100%, which can make a large taxable disposition an AMT trigger even when ordinary income is modest.
Credit limitation
Many non-refundable credits are limited to 50% for AMT, while the charitable donation tax credit has separate treatment. This simplified tool does not model return-specific credit adjustments.
Screening formula
The official T691 calculation contains additional adjustments, deductions, and credit rules.
Key AMT treatments
- Most capital gains: 100% for AMT, compared with 50% under current regular-tax rules.
- Employee stock options: the preferential deduction is restricted for AMT and depends on the option and deduction claimed.
- Many deductions and non-refundable credits: only 50% is generally allowed for AMT.
- Charitable donation tax credit: 80% is allowed under the reformed AMT rules.
Worked example: a $1 million gain
Assume a taxpayer has no other income and realizes a $1,000,000 capital gain in 2026. This deliberately simple example shows the screen before T691 adjustments and credits.
Frequently Asked Questions
Can I carry forward the AMT paid in 2026?
Will personal residence sales trigger AMT?
Is there a $250,000 capital-gains threshold in 2026?
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This calculator is an educational screening tool based on enacted federal rules and published 2026 thresholds. It does not reproduce every line of CRA Form T691 and is not tax advice. Use certified tax software or a qualified tax professional for filing decisions.