3.1ÌýÌýÌýÌý Employee stock options
In the US system, there are three main types of stock options:
- Ìý
•ÌýÌýÌýÌý Incentive Stock Options (ISO's)
- Ìý
•ÌýÌýÌýÌý Non-statutory (non-qualified) stock options (non-quals)
- Ìý
•ÌýÌýÌýÌý Employee Stock Purchase Plan Options (ESPP)
The payroll reporting and tax withholding vary based on the type of option income incurred by the employee.
Incentive stock options
- Ìý
•ÌýÌýÌýÌý Grant of stock option: not taxable to the employee.
- Ìý
•ÌýÌýÌýÌý Exercise and holding of the stock option: no federally reportable wage income for federal income tax withholding purposes, social tax or FUTA:
- Ìý
- Ìý
–ÌýÌýÌýÌý Employee may have reportable income related to the Alternative Minimum Tax (AMT). The employee would calculate and pay this tax through the employee's federal income tax return.
- Ìý
•ÌýÌýÌýÌý Exercise and Sale
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Web page updated on 28 Aug 2024 11:38