How do incentive stock options trigger AMT in 2025?

When you exercise an incentive stock option (ISO) and hold the shares past December 31, the "bargain element" — fair market value at exercise minus your strike price, times the number of shares — is an AMT preference item added to your AMTI. It is not in your regular taxable income, so it can push your tentative minimum tax above your regular tax and create AMT. (Source: IRS 2025 Instructions for Form 6251; IRC §56(b)(3).)

Can I avoid AMT on ISOs?

This tool only estimates the AMT — it is not advice. Common strategies people discuss with a tax professional include selling ISO shares in the same year as exercise (a disqualifying disposition that removes the AMT preference), or sizing exercises to stay under the point where tentative minimum tax exceeds regular tax. Any AMT you do pay can generate a minimum-tax credit usable in later years. (Source: IRS 2025 Instructions for Form 6251; Form 8801.)

Does this calculator handle capital gains and the AMT credit?

No. This is an estimator for ordinary-income AMT. It does not apply the Part III capital-gains / qualified-dividend carve-out (which keeps those at the lower capital-gains rates), the AMT foreign tax credit, or the prior-year minimum-tax credit (Form 8801). You enter AMTI and regular tax directly; the full computation is on Form 6251. (Source: IRS 2025 Instructions for Form 6251.)

Is my data sent anywhere when I use this calculator?

No. All calculations run entirely in your browser using JavaScript. No income figures or other inputs are ever transmitted to any server.

ISO AMT Calculator 2025 — Incentive Stock Option AMT Estimator

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ISO AMT Calculator 2025

Exercising incentive stock options (ISOs) and holding the shares adds the bargain element to your AMTI — a classic AMT trigger, because that amount is not in your regular taxable income. Add it to your AMTI below to estimate the 2025 AMT.

Enter your AMTI, filing status, and regular federal tax below to see the exemption (after phase-out), the taxable excess, the tentative minimum tax at 26%/28%, and whether any AMT is owed on top of regular tax. Everything runs in your browser — no data is transmitted.

Important: This is an estimator for ordinary-income AMT. It does not model the Part III capital-gains / qualified-dividend carve-out, the AMT foreign tax credit, the prior-year minimum-tax credit (Form 8801), or the preference-item add-backs that turn regular taxable income into AMTI — you enter AMTI and regular tax directly. Source: IRS Rev. Proc. 2024-40 §2.13 and IRS “2025 Instructions for Form 6251”; AMT rate structure per IRC §55(b)(1); figures for the 2025 tax year, data as of 2024-10-22. For 2026, AMT changed materially under the One Big Beautiful Bill Act (different exemptions; a 50%, $500k/$1M phase-out). Rates and thresholds change; this is not tax or legal advice.