ISO AMT calculator: your zero-AMT exercise ceiling
How much of your ISO grant can you exercise before the alternative minimum tax starts, and what does a larger exercise cost in AMT?
Updated November 4, 2026 Sources and methodology
How the crossover is found
AMT applies when tentative minimum tax (TMT) exceeds regular tax. TMT is computed on alternative minimum taxable income, and for an ISO exercise AMTI is your regular taxable income plus the bargain element, with the standard deduction disallowed. This calculator solves the equation numerically: it increases the spread until TMT crosses the regular tax line, then reports that spread, in dollars and in options.
Three 2026 parameters drive the answer: an exemption of $90,100 (single) or $140,200 (joint), a 26%/28% rate structure that switches at $244,500 of AMT base, and an exemption phaseout of 50 cents per dollar of AMTI above $500,000 (single) or $1,000,000 (joint).
Reading the output
| Row | Meaning |
|---|---|
| Bargain element | Spread on the exercise you entered |
| AMTI | Income plus spread, standard deduction removed |
| Exemption allowed | After the 50% phaseout |
| Tentative minimum tax | 26% / 28% on the AMT base |
| Crossover spread | Largest spread that still produces zero AMT |
| Crossover options | The same amount expressed in shares |
When the AMT exceeds the value of the stock
If you exercise early in the year on a high private valuation and the price falls before you sell, you still owe AMT on the exercise-date value. It is the most expensive mistake in equity compensation, and the reason the crossover point is usually treated as a hard ceiling for cash you cannot afford to lose. If the exercise is large enough that a qualifying disposition is unrealistic, compare it with an NSO exercise, where the tax is ordinary, but the cash is known at exercise.
Frequently asked
What is the AMT crossover point?
It is the amount of ISO bargain element you can add to your income before the tentative minimum tax exceeds your regular tax. Below that point, an exercise creates no AMT liability. Above it, every extra dollar of spread is taxed at 26% or 28% in the exercise year.
Why does the crossover point move?
It depends on your regular tax, your filing status, and how much AMTI you already have. Above $500,000 of AMTI for single filers ($1,000,000 joint) the exemption phases out at 50 cents per dollar, so each additional dollar of spread costs 1.5 dollars of exemption and the effective AMT rate rises to 39–42% (1.5 × 26% or 28%).
Should I exercise up to the crossover every year?
Exercising up to the crossover avoids AMT but may not be the cheapest strategy: exercising more now can start the capital-gain clock earlier, and AMT paid generates a credit. The crossover is a ceiling for cash-flow safety, not a rule.
Sources. IRS Rev. Proc. 2025-32 for 2026 AMT exemptions, phaseout thresholds, complete-phaseout amounts and the 28% breakpoint. Code sections 55 and 56(b)(3). The model ignores other AMT adjustments (private activity bonds, depletion, incentive-based depreciation) and prior-year minimum tax credits.