AMT Trigger Calculator
Calculate Alternative Minimum Tax exposure from ISO exercises. Find the maximum number of shares you can exercise without triggering AMT in 2026.
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When you exercise Incentive Stock Options (ISOs), the spread between the fair market value and the strike price is an Alternative Minimum Tax preference item — even though it's not regular taxable income. This bargain element is added to your AMT income (AMTI), and if AMT exceeds regular tax, you owe the difference.
The 2026 AMT exemption is $88,100 single / $137,000 married, with phase-outs beginning at $626,350 / $1,252,700. The phase-out reduces the exemption by 25 cents per dollar of AMTI over the threshold. AMT rates are 26% on the first $239,100 of AMTI and 28% above.
Strategic implication: the maximum safe exercise (no AMT) is the amount where AMT equals your regular tax. Above that, you pay AMT immediately in cash, even though you have illiquid shares. The classic ISO trap: exercise late in the year, hold for qualifying disposition, watch the stock crash in January, owe AMT on phantom income.
AMT paid is tracked as a credit (Form 8801) and can offset regular tax in future years when regular tax exceeds AMT. So AMT isn't lost forever — it's a prepayment. But the cash flow timing is brutal, and many people exercise more than they can afford to pay.