Return to NASPP Blog
The NASPP Blog

Year End Checklist: 5 Things to Add

Subscribe to the NASPP Blog

December 05, 2019 | Jennifer Namazi

Year End Checklist: 5 Things to Add

Whether or not you have a formal checklist to manage year-end tasks, undoubtedly a list exists somewhere – even if it’s only in your head (if that’s the case, though, I’d recommend putting a written checklist together pronto!) Here are 5 things you’ll want to make sure you don’t overlook as year-end approaches.

U.S. non-employees aren’t exempt from income reporting.
While payroll usually handles the income tax reporting for employees, it’s not always apparent who handles the reporting of income for non-employees, such as directors. Non-employees will need a Form 1099 for any U.S. reportable income. Make sure you know who will handle the 1099 reporting and that a process exists to ensure timely reporting of stock plan (and other) income for that population.

Terminated employees (U.S.) are still subject to employer reporting of stock plan income and tax withholdings, regardless of when they left the company.
In cases where the employee left the company in the same calendar year (for example, in 2019), payroll is already reporting income and applicable taxes since the employee would have received a paycheck. Potential oversights can occur when a terminated employee engages in a tax reportable stock plan transaction in a calendar year when they received no other income from the company. For example, employee Joe terminated employment with the company on December 31, 2018, but exercised stock options on January 20, 2019. Joe didn’t receive a paycheck in 2019, but he will still need to receive a Form W-2 (U.S. employees) to report the income and any tax withholdings.

You’ll need to coordinate with Payroll on process to ensure proper reporting for former employees. Somebody (Payroll? HR? Stock Plan Administrator?) will also need to make a best effort to ensure they have the correct mailing address for each terminated employee, since the W-2 will be mailed to them.

Remember to adjust tax withholding rates accordingly for 2020.
If you’re working with a third party provider who handles withholding of taxes on participant transactions, they likely are on top of this. If you have a recordkeeping system that you are administering in-house, you may need to make adjustments to tax withholding rates yourself. Tax rates are effective January 1, so make sure your new rates are in the system by then. For changes to U.S. tax rates that will take effect in 2020, view the recent NASPP blog “Year-End Tax Updates.”

Review Plan Limits on Shares (and any other limits!)
The turnover of the year is a great time to review limits established within your stock plan. Does your plan cap the maximum number of shares to be issued from the plan in a calendar year? Did you add shares to your plan this year and remember to account for them in total shares available? Take stock of the limits (no pun intended) and ensure the company’s grant practices are and have been in line with any restrictions.

Don’t forget your non-U.S. employees.
Administering global stock plans brings no shortage of requirements to navigate. Outside the U.S. not all countries operate on a calendar year tax basis. That’s good news in terms of spreading out the reporting timeline and tasks. However, make sure you are aware of the income and tax reporting deadlines for each country in which you offer equity and have planned accordingly.   

With these tips and a written checklist in hand, stock plan administrators should be poised to minimize mistakes and maximize efficiency in tackling the year-end to do list.


About Us

The National Association of Stock Plan Professionals is the largest and oldest professional association for the stock and executive compensation community, with over two decades of leadership providing expert resources, education and other benefits for our more than 6,000 members across 32 affiliated chapters.


P.O. Box 21639 Concord, CA 94521-0639 Telephone: (925) 685-9271 Fax: (925) 930-9284

©NASPP 2019, All Rights Reserved.