How many ISOs can you exercise before AMT hits?
The 2026 tax law changed the answer. Run your numbers and get your safe exercise count before you buy a single share.
ISO AMT Calculator
Your AMT results
Fill in your income and ISO grant details to see how many shares you can exercise before AMT.
- Uses 2026 federal figures from IRS Rev. Proc. 2025-32: AMT exemption of $90,100 / $140,200, phaseout above $500K / $1M at 50¢ per dollar, 26% / 28% AMT rates, and 2026 ordinary brackets with the standard deduction.
- Federal only. State income tax and state AMT are not modeled.
- Assumes W-2 income with the standard deduction; no itemized deductions, capital gains, dependents, or other AMT preference items.
- Your snapshot reflects this year's numbers only. Your AMT-free amount shifts as your income and 409A value change, so re-run it before you act.
This is an estimate only. Consult a qualified tax or financial advisor for personalized advice.
AMT rules just got tighter for ISO holders.
In 2026, you can exercise incentive stock options AMT-free only until your bargain element pushes tentative minimum tax past your regular tax. The exemption is $90,100 single or $140,200 married filing jointly, and it now shrinks 50¢ per $1 of AMT income above $500,000 or $1,000,000.
1Phaseout starts sooner
The One Big Beautiful Bill Act reverted phaseout thresholds to $500K (single) and $1M (married) of AMT income. A large ISO exercise clears that bar easily.
2Phaseout bites twice as hard
The exemption now phases out at 50¢ per dollar, double the old rate. Inside the zone, each dollar of bargain element faces an effective 42% AMT rate.
3The crossover resets Dec 31
Your safe exercise amount is a per-year allowance. Shares you don't exercise under this year's crossover wait for next year's. Meanwhile, your 409A value keeps moving.
ISO and AMT questions, answered straight.
- Up to your AMT crossover point: the bargain element (409A value minus strike price, times shares) you can add before your tentative minimum tax exceeds your regular tax. For 2026 the AMT exemption is $90,100 (single) or $140,200 (married filing jointly), and the crossover depends on your income and filing status. The calculator above computes your exact share count.
- The One Big Beautiful Bill Act (OBBBA) reverted the exemption phaseout thresholds to $500,000 (single) and $1,000,000 (married filing jointly) and doubled the phaseout rate to 50 cents per dollar. Inside the phaseout zone, each extra dollar of ISO bargain element faces an effective 42% AMT rate, up from 35% under the old rules.
- No. A same-year sale removes the bargain element from AMT income entirely. The trade-off is that the spread is taxed as ordinary income and you forfeit long-term capital gains treatment on those shares (a disqualifying disposition).
- Usually not. AMT paid on an ISO exercise creates a credit (IRS Form 8801) that carries forward indefinitely and offsets regular tax in future years, typically recovered in the year you sell the shares.
- This calculator, like most free ones, can only model one strike price and FMV at a time. The real crossover math requires stacking each grant's bargain element separately against your AMT exemption, not averaging them into one number. Talk to a CFP® about it so nothing gets double-counted or missed.
- It can, and often in a way an ISO calculator won't catch. Some tender offers convert vested RSUs to common stock to facilitate the sale or cover taxes, and that conversion can create W-2 income even if you don't personally sell a single share. That's ordinary income, not an ISO bargain element, so it changes your regular tax picture, not just AMT. Talk to a CFP® about it before a tender offer changes your tax bill without warning.
Beyond the Calculator
Your real crossover depends on your full picture.
RSUs vesting alongside your ISOs, a spouse's income, state taxes, a tender offer on the horizon: every one moves your number. The Equity Architect builds ISO exercise strategies for tech employees around all of it. Bring your results to a free 30-minute call with Mitchell Ludwig, CFP®.