ISO vs NSO options: tax implications explained
The key practical differences between incentive stock options and non-qualified stock options.
Two grants can look identical and tax very differently
ISOs and NSOs can have the same option count, strike price, and vesting schedule, but different tax treatment. That means the same headline grant can create different cash needs and risk.
Grantwise separates the option type because US ISO grants can create AMT exposure when there is spread at exercise.
The spread is where surprises start
The spread is the difference between the current share price and your strike price. If you exercise when that spread is large, taxes may show up before you can sell shares.
For US ISO grants, Grantwise shows an AMT exposure estimate separately instead of hiding it inside a generic tax line.
Ask before you exercise
The right exercise decision depends on your grant type, company stage, cash position, country, and timing. A calculator can show the mechanics, but it cannot replace tax advice.
Use the model to ask better questions before committing cash.
Model your offer
Turn the theory into numbers.
Use the checker to model dilution, strike cost, tax, AMT exposure, and liquidation preference across four outcomes.
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