2026 AMT Changes and How They May Affect Your SpaceX Stock | Jimmy Bisharat
- Jimmy Bisharat
- 5 days ago
- 3 min read
Updated: 9 hours ago
2026 AMT Changes and How They May Affect Your SpaceX Stock
By Jimmy Bisharat
If you work at SpaceX or any company that offers equity compensation, there are several planning considerations that employees may want to revisit in 2026. Recent tax law changes may impact how incentive stock options (ISOs) are treated for certain individuals, particularly around exercising shares, alternative minimum tax (AMT) exposure, and long-term tax planning strategies. Because tax situations vary significantly from person to person, it’s important to evaluate these decisions carefully and with qualified tax and financial professionals.
One area that often catches employees off guard is the AMT, which may apply when ISOs are exercised. Depending on income, exercise size, and other factors, some employees may experience a higher tax impact than expected. In some cases, exercising the same number of shares in 2026 could produce a different tax result than in prior years.
One significant change is how quickly high earners may lose the AMT exemption. Previously, the exemption phased out more gradually and at higher income thresholds. Beginning in 2026, the phaseout starts sooner and phases out at a faster rate. In practical terms, that means employees exercising the same number of ISOs as in prior years could face a materially higher AMT bill in 2026. For employees at private companies like SpaceX, this becomes especially important because the tax could be triggered before there is liquidity available to help cover it. As 409A valuations continue to rise, the spread between the strike price and fair market value can grow significantly, increasing potential AMT exposure even further.
None of this means exercising ISOs is necessarily the wrong decision. Rather, it highlights the importance of reviewing whether a prior strategy still aligns with current tax rules, liquidity constraints, cash flow needs, and long-term goals. Some areas employees may want to evaluate include whether sufficient cash reserves exist to cover potential tax liabilities, if exercising over multiple tax years may be more appropriate than a single large exercise, and how company tender offers or liquidity events may impact planning.
Because equity compensation planning is highly individualized, employees should consult with their CPA/tax advisor, and financial advisor before making any decisions related to exercising options or selling shares.
If you’re evaluating vested options and want a clearer understanding of how different exercise scenarios may impact your taxes and financial plan, I’m happy to have a conversation. My team works with employees navigating ISOs, NQSOs, and RSUs, and we can help you build a plan around your specific situation.
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Jimmy Bisharat is a Financial Advisor of Santa Monica, California-based Gerber Kawasaki Inc., an SEC-registered investment firm with approximately ~$4.02B billion in assets under management and assets under advisement as of 12/31/25. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss. Readers shouldn't buy any investment without doing their research to determine if the investments are suitable for their situation. “All investments involve risk and one should consult a financial advisor before making any investments. Past performance is not indicative of future results."
