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ISO Exercise

Estimate the AMT from exercising incentive stock options, using the 2026 exemption, phase-out and rates, and find how much spread you can exercise before AMT applies.

Updated November 4, 2026. Free, no sign-up; everything runs in your browser and nothing you type is stored.

ISO exercise AMT calculator (2026)

Shares to exerciseStrike price ($)Fair market value at exercise ($)Regular taxable income without the exercise ($)Filing status

Estimated AMT from this exercise

–

–Bargain element (AMT income)

–Cash to exercise

–Regular federal tax

–Spread you can exercise before AMT

ISO exercise: why it can trigger AMT

Exercising incentive stock options (ISOs) and holding the shares isn't taxed for regular income tax, but the bargain element (fair market value minus strike price, times shares) counts as income for the alternative minimum tax (AMT) on Form 6251. You owe AMT if your tentative minimum tax is higher than your regular tax.

2026 AMT numbers (Rev. Proc. 2025-32)

Exemption: $90,100 single, $140,200 married filing jointly ($70,100 separately).
The exemption phases out starting at $500,000 of AMT income ($1,000,000 joint), reduced by 50 cents per dollar, and is gone at $680,200 ($1,280,400 joint).
AMT rates: 26% on the first $244,500 of income above the exemption, 28% above that.

Example: single, $150,000 of taxable income, exercising 5,000 ISOs with a $5 strike when the stock is $25 (a $100,000 spread): estimated AMT about $17,162. With that income you could exercise roughly $33,992 of spread before owing any AMT.

Planning an ISO exercise

Spread exercises over several years to stay under the AMT crossover each year.
Holding ISO shares at least 2 years from grant and 1 year from exercise makes the gain long-term (a qualifying disposition); selling earlier turns the spread into ordinary wages (a disqualifying disposition) and removes the AMT adjustment for that year.
AMT paid on ISOs can create a minimum tax credit you may recover in later years.

This estimate uses the standard deduction and ignores other AMT items (state and local tax, private activity bond interest) and long-term capital gains rates; use tax software or a CPA for a final number.

Common questions

Does exercising ISOs trigger AMT?

It can: the bargain element is AMT income in the year you exercise and hold the shares.

What is the 2026 AMT exemption?

$90,100 single and $140,200 married filing jointly, phasing out above $500,000 and $1,000,000.

How many ISOs can I exercise without paying AMT?

Until your tentative minimum tax reaches your regular tax; the calculator finds that spread for your income.

What is a qualifying disposition?

Selling ISO shares at least 2 years after grant and 1 year after exercise, so the gain is long-term.

Sources

More investing and trading calculators: Stock Split Calculator · Dollar Cost Averaging · Net Investment Income Tax · Real Estate Investment Trust (REIT)

General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.