Rates and brackets stay
The federal brackets of 10% to 37% were made permanent instead of expiring after 2025. For 2026, the standard deduction is $16,100 single and $32,200 married filing jointly.
AMT: more ISO exercisers affected
The AMT exemption was kept at the higher level ($90,100 single, $140,200 joint in 2026). But two changes make it disappear faster for high earners:
- The phaseout now begins at $500,000 single / $1,000,000 joint, down from about $626,000 / $1.25 million.
- The exemption shrinks by 50% per dollar over the threshold, instead of 25 cents.
What it means: a smaller ISO exercise can trigger AMT than in past years, especially if you also have high salary or RSU income. See ISOs and the AMT.
QSBS: faster and bigger
For stock issued after July 4, 2025:
- Partial exclusions at 3 years (50%) and 4 years (75%); 100% at 5 years
- Cap raised to $15,000,000 per company
- Company asset limit raised to $75,000,000
See QSBS explained.
SALT deduction cap raised, with a catch
The cap on deducting state and local taxes rose to about $40,400 for 2026, but it phases back down toward $10,000 once income passes about $505,000. In a big IPO year, many people get only the $10,000 floor.
A new limit on itemized deductions
For people in the 37% bracket, itemized deductions are now worth at most 35 cents per dollar.
What didn't change
- Supplemental withholding: 22%, and 37% above $1,000,000
- Long-term capital gains rates and the 3.8% NIIT
- ISO holding periods and the $100,000 limit
Up to date in the calculator
The calculator uses the 2026 tables, including the new AMT phaseout and SALT cap.
General information, not tax advice.
Frequently asked questions
Are tax brackets changing in 2026?
Federal tax brackets will remain set between 10% and 37% for 2026. These rates were recently made permanent instead of expiring as originally scheduled after 2025. This means that the existing income tax structure remains in place for the upcoming tax year.
How do 2026 AMT rules affect ISO exercises?
While the AMT exemption remains at $90,100 for singles and $140,200 for couples, it now disappears much faster due to a lower phaseout threshold and a steeper reduction rate of 50 cents per dollar. Consequently, smaller ISO exercises are more likely to trigger AMT, especially if you also earn high salary or RSU income.
What are the new QSBS rules for 2026?
For stock issued after July 4, 2025, the QSBS program offers partial gain exclusions at three and four years, with a 100% exclusion available at five years. Additionally, the per-company gain cap has been raised to $15 million, and the company asset limit has increased to $75 million.
What is the 2026 SALT deduction limit?
The state and local tax deduction cap has increased to approximately $40,400 for 2026. However, this cap phases down toward a $10,000 floor once your income exceeds roughly $505,000. Many individuals experiencing a large IPO year will likely find themselves limited to that $10,000 floor.
Official sources (for the detail-minded)
- Pub. L. 119-21 (2025)The 2025 tax law behind the 2026 changes
- IRC Section 164(b)(7)The state and local tax (SALT) deduction cap
- IRC Section 1202Updated QSBS exclusion rules
- IRC Section 55(d)AMT exemption amounts and phase-out
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Estimates only. Not tax, legal, or investment advice. See our methodology