ISO AMT calculator for 2026
Short answer: When you exercise incentive stock options and hold the shares past year-end, the spread between the exercise price and fair market value is added to income for the alternative minimum tax. You owe AMT if your tentative minimum tax is higher than your regular tax. This estimator uses 2026 IRS figures; enter your own numbers.
ISO AMT estimate (2026) i
Deduction add-back: your standard deduction if you do not itemize, or the state and local taxes you deducted if you itemize.
2026 AMT figures used here
| Filing status | Exemption | Phaseout starts |
|---|---|---|
| Single / head of household | $90,100 | $500,000 |
| Married filing jointly | $140,200 | $1,000,000 |
| Married filing separately | $70,100 | $500,000 |
The exemption shrinks by 50 cents for each dollar of AMT income above the phaseout threshold. The AMT rate is 26% on the first $244,500 of income above the exemption ($122,250 if married filing separately) and 28% above that. Figures are from IRS Rev. Proc. 2025-32 and the 2026 Form 6251 instructions.
Cash tied up, not just tax owed
The tax number is only half the decision. An exercise ties up the exercise cost plus any AMT, and some of that AMT may come back later as a credit. Doug said many preparers can tell a client they might trigger AMT but stop short of the trade-off.
“how much cash are we tying up in AMT plus exercise cost and what is the potential tax savings that we are going to realize?”
— Doug Johnson
That is why the calculator shows the exercise cost and AMT together, and an estimate of how much spread you could add before AMT starts.
AMT you pay can come back as a credit
“Now when you generate AMT that is going to also allow for a carry forward credit that is called the minimum tax credit.”
— Doug Johnson
The credit is claimed on Form 8801 in later years, often over more than one year. Doug described a client whose prior preparer missed it after an ISO exercise. See how one engineer got AMT back and 7 mistakes that turn an ISO exercise into an AMT bill.
What this estimator leaves out
- Capital gains and qualified dividends taxed at preferential rates inside AMT
- Other AMT adjustments such as private activity bond interest or depreciation
- State AMT
- The AMT foreign tax credit and existing minimum tax credits
Treat the output as a starting point for a conversation with a CPA who models equity compensation. More: accountants for equity compensation and RSU tax calculator.
Take the quiz, or request quotes. Get a quote does not show matched firm names to visitors.
Frequently asked questions
What is the 2026 AMT exemption?
$90,100 for single and head of household filers, $140,200 for married filing jointly, and $70,100 for married filing separately, per IRS Rev. Proc. 2025-32.
When does the AMT exemption phase out in 2026?
It starts phasing out at $500,000 of AMT income for single filers and $1,000,000 for joint filers, at 50 cents per dollar above the threshold.
Does exercising ISOs always trigger AMT?
No. The spread counts for AMT only if you hold the shares past the end of the year of exercise, and you owe AMT only if tentative minimum tax exceeds your regular tax.
What is the minimum tax credit?
AMT caused by timing items like an ISO exercise can create a credit you may use in later years, claimed on Form 8801.
Is this tax advice?
No. It is a simplified estimate. Confirm your numbers with a CPA before you exercise.
A boutique CPA firm dedicated to responsiveness and a white-glove client experience. We're the CPA firm for growing businesses with 250K - 10M in revenue, and high earners with equity compensation.
See Doug Johnson CPA’s profileRelated reading: ISO, NSO and ESPP planning questions, ISO vs NSO tax.
Some professionals on Sam’s List pay for visibility or leads. Inclusion and order do not rank professionals. This page is educational and is not tax, legal, or investment advice. Firm names are never shown on Get a quote matches.
Quotes and client examples are what Doug Johnson described; they are not a guarantee of results.