AMT and Energy Credits 2026: Will Alternative Minimum Tax Affect Your Refund?
The federal 25D Residential Clean Energy Credit (solar/battery/geothermal) and 30D Clean Vehicle Credit are NOT limited by Alternative Minimum Tax (AMT) — both can offset AMT liability. The federal 25C Energy Efficient Home Improvement Credit IS limited by AMT — meaning if you owe AMT, your 25C credit may be reduced. For most middle-income filers AMT does not apply (Tax Cuts and Jobs Act raised AMT exemptions significantly), but high-income filers in high-tax states (CA, NY, NJ) should run AMT calculations before assuming full 25C value.
How AMT Works in 2026
Alternative Minimum Tax is a parallel tax calculation designed to ensure high-income filers pay at least a minimum amount. AMT exemption for 2026: $85,700 single, $133,300 MFJ (estimated, indexed). Phase-out begins at $609,350 single / $1,218,700 MFJ.
25D and AMT
The Residential Clean Energy Credit (25D) is allowed against both regular tax and AMT. Even if you owe AMT, the full 30% credit applies. This makes 25D one of the most flexible credits.
25C and AMT
The Energy Efficient Home Improvement Credit (25C) is limited against AMT. If you owe AMT, your 25C credit may be reduced or eliminated. Form 5695 includes the AMT calculation.
30D and AMT
The Clean Vehicle Credit (30D) is allowed against both regular and AMT. Full credit applies regardless of AMT.
Who is at AMT Risk in 2026?
High-income filers in high-tax states with significant SALT (state and local tax) deductions, ISO exercises, or large miscellaneous itemized deductions. Most middle-income filers are not at AMT risk after 2018 reforms.