This calculator supports UK/US assumptions only. Choose the applicable market in the calculator or its named UK/US tool. Israeli rules are not implemented.
Compare the additional tax from an ISO with the same income without the option. Exercise-year AMT and sale-year federal tax are separate; any future AMT credit is not assumed.
Later-year scenarios hold 2026 tax rules, filing status and other AMTI additions fixed. Enter the separate salary expected in the sale year; this is a current-law projection.
Option cash after exercise cost and modeled tax: —
Confirm the arm’s-length sale and no-other-gains/losses assumptions before an estimate is shown.
Tax and option-net figures are withheld when the selected facts are outside the supported model. No AMT credit is assumed.
2026 federal planning model for single or joint filers under age 65 taking the basic standard deduction, with salary as the only other income, no credits or other deductions, and fully vested statutory ISO shares. It excludes prior-year AMT credits, restricted/early exercise, employment eligibility exceptions, fees, state AMT and actual state brackets. The flat state assumption applies only to positive option gain and provides no loss benefit. It is separate from federal AMT and never creates federal state-tax relief. The same positive AMTI additions are assumed in each modeled year. Totals are incremental exercise plus sale tax before any future credit, not the tax on salary or a promise of final lifetime tax.
Calculation check: 20 October 2026. 2026 AMT exemptions: $90,100 single / $140,200 joint; 50% phase-out starts at $500,000 / $1,000,000 and reaches zero at $680,200 / $1,280,400. The 26%/28% breakpoint is $244,500. Continuing ISO and Form 6251/8801 rules use the current IRS instructions; future sale-year law may change.
2026-law projection: joint filers, one earner, $250,000 salary in both years, 10,000 statutory ISO shares with $5 strike, $50 exercise FMV and a later qualifying sale at $75. The flat state assumption is 5%, with no other AMTI additions.
Both statutory holding periods and an arm’s-length sale with no other gains/losses are assumed confirmed. Basic standard deduction and under-65 scope apply. Regular and AMT bases differ; future law is held at 2026 rules. Form 8801 credit recovery is not computed or subtracted. The state figure is a supplied arithmetic assumption.
Calculation checked 21 October 2026. Figures are illustrative and rounded; the calculator keeps unrounded intermediate values.
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No. Form 8801 distinguishes deferral items from exclusion items; only eligible deferral-related AMT can create a minimum-tax credit. Its use also depends on later returns and limits. This calculator does not compute a credit or subtract assumed recovery from the displayed tax.
A qualifying sale must meet both statutory holding periods: more than one year after exercise and more than two years after grant. Its regular gain generally uses strike basis; AMT basis includes the exercise adjustment. A sale in the exercise year has no ISO exercise AMT adjustment and can create ordinary compensation plus short-term capital gain. Statutory ISO remuneration is excluded from Social Security and Medicare wages.
Later disqualifying sales and later sales below the exercise-date AMT basis can require different gains, losses, carryovers and minimum-tax credit records. Those details are not available here. The calculator withholds a precise total for these cases.
The limit concerns grant-date fair market value of shares first exercisable during a calendar year across relevant plans, not their strike cost or current value. Shares exceeding the statutory limit may be nonqualified options. This calculator assumes the entered shares are valid statutory ISOs and does not test the limit or employment requirements.
No. They project 2026 federal rules using a separate sale-year salary. The basic standard deduction and filing status are fixed, and no future credit recovery is assumed. The flat state percentage is an optional arithmetic assumption, not a calculation of any state’s liability.