Stock Compensation Tax Planner 2026 β RSU, ISO, ESPP Combined Calculator
Calculate combined tax on RSU vesting, ISO exercise, and ESPP income. Check AMT exposure, model 4-year vesting schedule, and see quarterly estimated tax impact.
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e.g. CA 9.3%, NY 6.85%, TX 0% RSUs Vesting This Year
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FMV of shares at vest date β this is W-2 income $
Typically 22% flat rate withheld by employer ISOs Exercised This Year
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409A valuation or market price at exercise Shares sold immediately β creates ordinary income (disqualifying disposition)
ESPP
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Max $25,000 FMV per year for qualified ESPP $0
Total Tax Owed
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AMT Preference (ISO Spread)
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Additional Tax After Withholding
0%
Effective Tax Rate
Stock Compensation Tax Breakdown
How Stock Compensation Taxes Work
Each type of equity compensation β RSUs, ISOs, and ESPPs β has distinct tax timing and rates. Combining them can push you into high tax brackets and may trigger AMT. Planning ahead each year is essential.
Tax Treatment Summary
RSUs: Ordinary income at vest + FICA + state tax
ISOs (exercise, no sale): No regular tax; AMT spread = (FMV β exercise price) Γ shares
ISOs (disqualifying disposition β sold same year): Ordinary income on spread
ESPP: Ordinary income on discount; additional gain may be LTCG if qualifying
AMT Exemption 2026: $88,100 single / $137,000 MFJ
AMT Rate: 26% up to $232,600 (28% above) for single
ISOs (exercise, no sale): No regular tax; AMT spread = (FMV β exercise price) Γ shares
ISOs (disqualifying disposition β sold same year): Ordinary income on spread
ESPP: Ordinary income on discount; additional gain may be LTCG if qualifying
AMT Exemption 2026: $88,100 single / $137,000 MFJ
AMT Rate: 26% up to $232,600 (28% above) for single
Extended
4-Year Vesting Schedule & Quarterly Tax Impact
Model a full 4-year vest with 1-year cliff and see quarterly tax payments required
Model a standard 4-year vesting schedule with 1-year cliff. Enter total grant and expected annual stock price growth to see quarterly estimated tax requirements.
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| Period | Vesting Event | Shares Vested | Price at Vest | Vest Value | Est. Tax (Fed+State) | Est. Quarterly Payment |
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Frequently Asked Questions
How are RSUs taxed when they vest?
Restricted Stock Units (RSUs) are taxed as ordinary income at the time of vesting. The fair market value of the shares on the vesting date is included in your W-2 as wages, subject to federal income tax, FICA (Social Security and Medicare), and state income tax. Your company will typically withhold a flat 22% (or 37% for supplemental wages above $1M), which may not match your actual marginal rate. The cost basis of the shares for future capital gains purposes equals the FMV at vesting.
What is the AMT risk with Incentive Stock Options (ISOs)?
When you exercise ISOs, you do not owe regular income tax β but the "spread" (FMV minus exercise price) is a preference item for Alternative Minimum Tax (AMT). If the spread is large enough, you may owe AMT in the year of exercise. For 2026, the AMT exemption is $88,100 for single filers and $137,000 for married filing jointly. The AMT rate is 26% up to $232,600 for single filers (28% above). You earn an AMT credit that can be used to offset regular tax in future years when you sell the shares.
How does an Employee Stock Purchase Plan (ESPP) work for taxes?
Under a typical qualified ESPP, you can purchase company stock at a discount of up to 15% from the lower of the price at the offering or purchase date. The discount is ordinary income in the year you sell the shares (not when purchased), reported on your W-2. Any additional gain above the discounted price may be LTCG if held over a year. Disqualifying dispositions (selling within 2 years of offering or 1 year of purchase) convert more of the gain to ordinary income.
How can I minimize taxes on RSU income?
Strategies to reduce RSU tax impact: (1) Max out 401(k) contributions to reduce AGI; (2) Make charitable contributions in high-vesting years using a donor-advised fund or donating shares directly (avoids capital gains); (3) Harvest capital losses to offset income; (4) Sell shares with highest basis first (HIFO accounting); (5) Consider moving to a no-income-tax state before RSUs vest if planning a major vesting event; (6) Ask your employer about tax withholding adjustments to avoid underpayment penalties.
What is the difference between NSOs and ISOs?
Non-qualified Stock Options (NSOs) are taxed as ordinary income on the spread at exercise, regardless of holding period. Incentive Stock Options (ISOs) have no regular tax at exercise but trigger AMT. For ISOs, if you hold the shares for 2+ years from grant and 1+ year from exercise, the entire gain at sale is long-term capital gain β this is the "qualifying disposition." NSOs are simpler and more common but less tax-advantaged. ISOs can deliver significant tax savings if planned correctly.