January 25, 2023
Tax Reporting: Deadlines for ISO Exercises & ESPP Purchases Reporting
The annual deadlines for filing information returns with the IRS & providing employees with information relating to 2022 ISO exercises and ESPP stock purchases are fast approaching. This Gunderson memo has details on what companies are required to file & the relevant deadlines. This excerpt explains the filing requirements:
Employers must file information returns with the Internal Revenue Service and provide employees with information statements related to incentive stock option exercises that occurred during calendar year 2022. Similarly, employers (typically relevant only for public companies) must file information returns with the IRS and provide employees with information statements related to initial transfers of stock acquired during 2022 under an employee stock purchase plan that complies with Internal Revenue Code Section 423.
The information returns to be filed with the IRS are Form 3921 (for incentive stock option exercises) and Form 3922 (for transfers of shares acquired under an employee stock purchase plan). Employers may satisfy the requirement to provide employees with an information statement by delivering to each employee “Copy B” of the applicable Form 3921 or 3922, or they may use substitute forms for the employee information statements, provided that the substitute forms meet published IRS guidance as to form and content.
Copy B of the relevant information statement must be delivered to employees by January 31, 2023. Paper filers have until February 28, 2023 to file the appropriate form with the IRS, while electronic filers have until March 31, 2023.
– John Jenkins