The tax benefit of ISOs, as compared to NSOs, is that there is no tax withholding or FICA payroll tax on exercise, and the spread at sale is taxed as capital gain; however, the spread on the exercise date counts as AMT income and may subject the holder to AMT in the year of exercise. This benefit may be enjoyed by the holder if (i) they do not sell the shares before the expiration of two different holding periods and (ii) they are not subject to alternative minimum tax (AMT) in the year of exercise.