The rapidly developing semiconductor industry demands constant innovations in optoelectronic imaging of semiconductor integrated circuits to keep up with continuing device scaling. It was recently shown that two-photon laser-assisted device alteration (2pLADA) can deliver precision fault isolation. Here we describe an investigation into the influence of the incident light polarization on the 2pLADA spatial resolution. Linear polarization provides a highly confined but elliptical focal spot, while circular polarization diminishes the lateral resolution but benefits from a symmetrical focal spot. Radially polarized light potentially provides the highest lateral imaging resolution in all directions at the expense of the longitudinal resolution. By comparing 2pLADA results obtained using linear, circular and radial polarizations we show that certain polarizations have advantages in particular applications. Therefore a polarization optimized 2pLADA tool can achieve a sufficiently high performance to isolate faults of transistors separated by as little as 100 nm and maybe smaller.