Qualified Stock Options (QSOs), also known as Incentive Stock Options (ISOs), are a type of employee stock option that offers favorable tax treatment. They allow employees to purchase shares of their company's stock at a predetermined price, known as the exercise price, typically set at the market value at the time of the grant. To qualify for tax benefits, QSOs must meet specific requirements, such as being granted only to employees and having a maximum exercise period of 10 years. If certain conditions are met, employees may pay lower capital gains tax rates when they sell the shares, rather than ordinary income tax rates.