Exercise ISOs, not AMT.
Exercising incentive stock options is tax-free until the moment it isn't. This free calculator finds your AMT crossover: the most shares you can exercise in 2026 at zero extra tax.
Salary, bonus, RSU vests, and other ordinary income for the year, before 401(k). Combine both spouses if filing jointly.
Payroll deductions that reduce taxable income for both regular tax and AMT.
What you pay per share to exercise, from your option grant.
The current 409A value for a private company, or the market price for a public one.
Only vested incentive stock options count. Leave nonqualified options out; they are taxed differently.
You can exercise about 1,411 of your 20,000 shares this year before AMT switches on. Exercising everything instead would create roughly $140,128 of AMT due with your 2026 return, real cash on paper gains you have not sold.
Federal estimate for tax year 2026. Regular tax uses the standard deduction and the ordinary brackets in Rev. Proc. 2025-32; AMT uses the §55 exemption of $90,100 single and $140,200 joint, the 50% phaseout above $500,000 and $1,000,000 of AMTI under the One Big Beautiful Bill Act, and the 28% rate above $244,500. Assumes all income is ordinary, no other AMT adjustments or preferences, and no capital gains. Ignores state tax and the AMT credit you may recover in later years. A planning estimate, not tax advice. Runs entirely in your browser; nothing is stored or sent.
Two tax systems, one winner.
Every year you pay the higher of two calculations: regular tax and the alternative minimum tax. ISO exercises are invisible to the first and fully visible to the second. The strategy is to use the gap between them, deliberately.
Your regular tax floor
We compute your 2026 regular federal tax without any exercise. That number is the ceiling your tentative minimum tax can rise to before AMT costs you anything.
The parallel AMT math
Each exercised share adds its bargain element to AMT income. We apply the 2026 exemption, the 50% phaseout above $500,000 or $1,000,000 of AMTI, and the 26% and 28% rates.
The crossover
The calculator searches for the exact share count where tentative minimum tax meets your regular tax. Below it, exercise free. Above it, every extra dollar of spread is taxed now.
Before you exercise.
Why do ISOs trigger AMT if exercising isn't a taxable sale?
For regular tax, exercising an incentive stock option and holding the shares creates no income. The alternative minimum tax runs on its own parallel rules, and under those rules the bargain element, the spread between fair market value and your strike price, counts as income in the year of exercise. If that pushes your tentative minimum tax above your regular tax, you pay the difference as AMT, in cash, on shares you have not sold.
What is the AMT crossover?
Your regular tax acts as a floor. Small exercises add AMT income but your tentative minimum tax stays below your regular tax, so nothing extra is owed. The crossover is the exact bargain element where the two meet. Every dollar of spread below it is AMT-free this year; every dollar above it is taxed at 26% to 28%. This calculator finds that point for your numbers.
What changed for AMT in 2026?
The One Big Beautiful Bill Act made the higher AMT exemption permanent but reset the exemption phaseout to begin at $500,000 of AMTI for single filers and $1,000,000 for joint filers, and doubled the phaseout rate to 50 cents per dollar. For high earners that shrank the AMT-free exercise room compared to 2025, which makes running the numbers before exercising more important, not less.
If I pay AMT on an exercise, is that money gone forever?
Usually not. AMT paid because of an ISO exercise generates a minimum tax credit under §53 that can offset regular tax in future years, subject to limits. It is closer to a forced prepayment than a pure cost, but the cash still leaves your account now, and recovering the credit can take years. The calculator shows the current-year bill only.
Does this calculator store my information?
No. It runs entirely in your browser. Nothing you type is sent to a server, stored, or shared.
Plan the exercise before the spread grows.
A multi-year exercise plan can move six figures of spread out from under AMT. Bring your grant details and thirty minutes.