The Equity Architect

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.

Isometric illustration of a calculator with AMT on its display

ISO AMT Calculator

Have multiple grants at different strike prices? This calculator handles one at a time — talk to a CFP® for help weighing them together.

Your AMT results

Fill in your income and ISO grant details to see how many shares you can exercise before AMT.

Methodology & Assumptions
  • 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.

Why 2026 Changed the Math

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 — levels a large ISO exercise clears 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 — while your 409A value keeps moving.

Common Questions

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®.

Book an Equity Strategy Call

Important disclosures

Mitchell Ludwig is a CERTIFIED FINANCIAL PLANNER™ professional and a Registered Investment Adviser Representative of Carolina Wealth Partners. Securities are offered through United Planners Financial Services, Member FINRA/SIPC. Carolina Wealth Partners and The Equity Architect are separate entities. Jon Ludwig is a Series 65–registered Investment Adviser Representative and promoter.

All content on this page is for informational and educational purposes only and does not constitute personalized investment, tax, or legal advice. Examples, illustrations, and client archetypes are composite in nature and do not represent any specific client. All tools and calculators are estimates only. Consult a qualified tax advisor or CFP® professional before making any financial decisions.

All marketing content is reviewed and approved by United Planners compliance in accordance with SEC Marketing Rule (Rule 206(4)–1). Past performance is not indicative of future results.