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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

Reminder of Annual Reporting and IRS Filing for ISO Exercises and ESPP Stock Transfers

This is a reminder for sponsors of equity incentive plans and tax-qualified ?Ç£employee stock purchase plans?Ç¥ (?Ç£ESPPs?Ç¥) of their year-end information reporting requirements under Section 6039 of the Internal Revenue Code with respect to stock issued to employees or former employees upon the exercise of ?Ç£incentive stock options?Ç¥ (?Ç£ISO?Ç¥) or transferred under an ESPP. The IRS has issued two forms that companies must use to satisfy the return and information statement requirements: (i) Form 3921, which is required when an employee (or former employee) exercises an ISO, and (ii) Form 3922, which is required when a company records the first transfer of legal title of shares acquired under an ESPP when either (a) the purchase price of the shares was less than the stock?ÇÖs fair market value on the date of grant or (b) the purchase price of the shares was not fixed or determinable on the date of grant.… Continue Reading

IRS Issues Revised Form 3922 and Related Instructions

IRS Form 3922 must be filed by a corporation for certain transfers of shares of stock pursuant to the exercise of options granted under an employee stock purchase plan in which the exercise price is less than 100 percent of fair market value (or is not fixed or determinable) on the date of grant.?á The IRS did not make substantive changes to Form 3922 or the related instructions. The forms and instructions can be found here: Revised Form. Revised Instructions.

Statements Due to Participants Who Exercised Incentive Stock Options in 2012 or Transferred Shares Acquired under an Employee Stock Purchase Plan in 2012

The January 31, 2013, deadline is approaching for an employer to provide statements to employees or former employees who exercised incentive stock options in 2012 or who first transferred legal title to shares acquired under an employee stock purchase plan with an option price between 85 percent and 100 percent of fair market value of the stock. In addition, the employer must file IRS Forms 3921 and 3922 with the IRS by February 28, 2013. The requirement can be found here. Related Treasury Regulations can be found here.

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