Carta now automatically checks for the ISO 100k limit in additional workflows and features across the app.
For companies issuing incentive stock options (ISOs), the IRS states that an employee cannot receive more than $100,000 USD worth of ISOs that become first exercisable in a given calendar year.
Based on some inputs (FMV, number of options granted, etc.), Carta automatically detects whether or not any grants for a given stakeholder are in violation of the ISO 100k limit. If any ISO grants are in violation of this rule, Carta will automatically change the award type from ISO to ISO/NSO:
Carta already runs this automated check any time a new award is issued. We've added this automated check in a few more places, so companies will no longer need to work with Carta staff to manually run the check when making common types of award modifications.
Lastly, we're also working on a new feature that will help companies better manage their ISO/NSO split grants.