ISO means incentive stock option. It is a type of stock option that is granted to employees of the granting entity (company). By granting; it means that the shares associated with the ISO will be issued to the employee in the future. When it comes to filing taxes with the Internal Revenue Service (IRS) ISOs are qualified to have a section 83(b) election, because of this, they are referred to as qualified stock options. Statutory stock options are another name by which these stock options are known.