Under Section 6039 of the Internal Revenue Code, employers must file returns with the IRS for employees who have exercised incentive stock options during the year or transferred shares acquired pursuant to Section 423 qualified employee stock purchase plans. This article provides an in-depth summary of the mechanics of preparing the filings on Form 3921 (ISOs) and Form 3922 (ESPPs) that are necessary to fulfill this requirement.
Participant statements required under Section 6039 are due by January 31. Here's what you need to know.
Late last year, the IRS issued final regulations affecting the form and operation of tax-qualified
employee stock purchase plans (ESPPs), as well as final regulations affecting the tax reporting of
transfers of shares acquired from ESPPs and exercises of incentive stock options (ISOs). These
rules went into effect Jan. 1, 2010.
The new ESPP rules include some important clarifications that may necessitate plan amendments or
changes in administrative practices (see our previous newsletter on the 2008 proposed regulations).
In addition, employees must receive information reports that meet updated requirements by Jan. 31,
2010, for ESPP and ISO share transactions that occurred in 2009.
Under Section 6039, participant statements for ISOs and ESPPs must be distributed by January 31.
Forms 3921 and 3922 are now available as online fillable forms. Sort of.
January 31 is quickly approaching: a few reminders about Section 6039 filings for ISOs and ESPPs.
Increased Penalties for Forms 3921 and 3922
Sample FAQs for a newly implemented ESPP.
Sample FAQ for employees on Forms 3921 and 3922.
Everything you need to know about U.S. year-end tax reporting!
Are you ready to comply with stock compensation reporting requirements for 2014?
IRS Form 3921, used to report ISO exercises.
IRS Form 3922, used to report first legal transfer of shares acquired under a Section 423 employee stock purchase plan (ESPP).
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