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Tax Withholding and Reporting Procedures

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NASPP Essentials

Figuring Out Section 6039 Filings
Jan 12,2021

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.

Current Withholding Rates
Jan 04,2021

Current US tax withholding rates and maximums for supplemental payments made in 2021.

Tax Reporting Guide for Stock Plan Transactions
Nov 18,2020

A series of tables indicating where income attributable to various stock plan transactions is reported on Form W-2 and Form 1099-MISC.

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Latest Developments

US Tax Updates for 2021
Jan 08,2021

Changes to US tax withholding rates and compensation thresholds for various tax-related purposes for 2021.

IRS Extends Relief on Tax Deposits to RSUs and SSARs
Jul 13,2020

A procedural update to the Internal Revenue Manual clarifies instructions relating to the application of late-deposit penalties to tax withholding for NQSOs and extends existing penalty relief to restricted stock units and stock-settled SARs.

IRS Guidance on Timing of Income Inclusion and Tax Withholding for Equity Awards
Jul 10,2020

IRS GLAM 2020-004 clarifies when income is recognized and the company's tax withholding deposit liability accrues for nonqualified stock option exercises, stock-settled SAR exercises, and payouts of restricted stock units.

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Cover Letter - ESPP Tax Report
Nov 24,2009

Cover letter for a report ESPP transactions distributed to participantes for tax purposes

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5 Things to Know About New 1099-NEC for Nonemployees
Nov 03,2020
Jennifer Namazi

Stock compensation income for nonemployees is now reported on the new Form 1099-NEC. Learn 5 things to know about this change.

3 Things for Your Year-End Checklist
Oct 22,2020
Jennifer Namazi

Three things you don't want to overlook in planning for 2020 year-end.

Year-End Tax Updates
Oct 20,2020
Barbara Baksa

The Social Security tax wage cap will increase in 2021 and a new form for reporting compensation paid to nonemployees.

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Sample Documents

ISO/ESPP Flow Charts: Section 6039 Flow Charts
Jan 12,2021

This presentation are a set of example sample flow charts that explain how employees should use the information in Forms 3921 and 3922 to report ISO and ESPP transactions on their tax returns. There are separate flow charts for situations where the 1099 reporting is unknown, is known to be net of fees, and is known to not be net of fees.

Form W-2 Reporting Checklist for Stock Compensation
Oct 28,2018

A checklist of income that should be reported on Form W-2 for various stock plan transactions.

Sample Disqualifying Disposition Survey for ISOs
Feb 05,2018

Sample survey to ask employees who hold shares acquired under incentive stock options if they sold, gifted or otherwise disposed of their shares before the statutory holding period lapsed.

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Complex Legal & Accounting Issues
Apr 15,2020

Understanding time consuming accounting and legal practices in equity compensation

Retirement Eligibility Survival Guide
Mar 18,2020

A deep dive into the many challenges facing issuers with a retirement eligible population.

2019 Tax Reporting Essentials
Dec 04,2019

Everything you need to know about U.S. year-end tax reporting!


5 Tax Reporting Tips
Jan 07,2021

Regulations & Statutes

IRS Publication 15: Employer's Tax Guide
Feb 15,2021

Describes the IRS procedures for withholding and depositing payroll taxes.

IRS Publication 15-B: Employer's Tax Guide to Fringe Benefits
Feb 15,2021

Explains Form W-2 reporting requirements for nonqualified stock options, incentive stock options (ISOs), Section 423 employee stock purchase plans (ESPPs), and qualified equity grants.

Notice 2020-65: Relief with Respect to Employment Tax Deadlines Affected by COVID-19
Aug 28,2020

Guidance on the deferral of the employee portion of Social Security tax under the 2020 payroll tax holiday.

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