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Upcoming Deadlines: Annual Reporting and IRS Filings for ISO Exercises and ESPP Stock Transfers

Employers sponsoring equity incentive plans or tax-qualified employee stock purchase plans (“ESPP”) must fulfill certain year-end information reporting requirements under Section 6039 of the Code with respect to company stock that is either (i) issued to current or former employees upon exercise of an incentive stock option (“ISO”), or (ii) transferred under an ESPP.  The two IRS forms used to satisfy those requirements are: Form 3921, which is required when an individual exercises an ISO. Form 3922, which is required when an individual acquires stock under an ESPP when either the purchase price of the shares (i) was less than the stock’s fair market value on the date of grant, or (ii) was not fixed or determinable on the date of grant. For ISO exercises and ESPP transfers occurring in the 2021 calendar year, employers should file Copy A of the applicable forms with the IRS no later than February… Continue Reading

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