2026 educational tax estimate
2026 ISO Exercise & AMT Calculator
Estimate the ISO bargain element, exercise cash, regular and AMT basis, incremental AMT, and an approximate no-new-AMT share limit.
Calculation methodology reviewed by Carina Luo, CPA
Based on 2026 federal tax rules. Last reviewed July 2026.
Direct answer
Exercising an ISO generally does not create regular federal wage income, but exercising and holding can add the bargain element to AMTI. This calculator applies the 2026 AMT exemption, phaseout, and 26%/28% rates, then compares tentative minimum tax with estimated regular tax to estimate incremental AMT.
Your inputs
Quick estimate
The quick model uses this to estimate regular tax and starting AMTI.
Use a tax projection or Form 6251 when available; enter zero if unknown.
2026
Estimated exercise impact
Estimated incremental AMT from this exercise
$22,113
Not simply spread multiplied by 26%; includes 2026 exemption, phaseout, and 26%/28% bands.
Exercise cash cost
$50,000
Bargain element
$150,000
Estimated total AMT liability
$22,113
Approx. shares before new AMT
4,735
Specific to these inputs and this quick model.
Regular-tax basis
$50,000
AMT basis
$200,000
Educational estimate only, not tax advice. Final results depend on full income, deductions, residency, prior returns, and transaction records.
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How the estimate works
The ISO bargain element is shares multiplied by exercise-date FMV minus strike price. The calculator adds that spread to estimated AMTI, applies the 2026 AMT exemption and phaseout, and compares AMT before and after the exercise. Regular basis equals strike price; AMT basis generally equals exercise-date FMV for shares held after exercise.
Important limitations
- A real Form 6251 includes deductions, preferences, capital gains, credits, and other items this quick model cannot infer.
- AMT paid because of an ISO may create a future minimum tax credit, but timing and usability require a full return projection.
Frequently asked questions
Is AMT simply 26% of the ISO spread?
No. Exemptions, phaseouts, the 28% band, regular tax, and other AMT items all matter.
Why are there two bases?
The regular-tax basis generally starts with the strike price, while the AMT basis generally includes the ISO adjustment from exercise.
Does selling in the same year eliminate the exercise AMT adjustment?
A same-year disqualifying disposition generally changes the treatment, but the exact result depends on the sale price and full return.