Navigate Up
Sign In

IRS Reporting on Incentive Stock Option and Employee Stock Purchase Plans


The IRS is requiring information reporting on Forms 3921 and 3922 for certain stock transfers occurring after 2009. As such, transfers occurring during 2010 or later tax years will now need to be reported.

Every corporation which in any calendar year transfers to any employee a share of stock pursuant to that employee’s exercise of an incentive stock option must for that calendar year file Form 3921 for each transfer made during that tax year. Information to be reported includes the date the option was granted, the date the option was exercised, the exercise price per share, the fair market value per share on the exercise date, and the number of shares transferred.

Every corporation, which in any calendar year records, or has by its agent recorded, a transfer of the legal title of a share of stock acquired by the employee pursuant to the employee’s exercise of an option granted under an employee stock purchase plan where the exercise price is less than 100 percent of the value of the stock on the date of grant, or is not fixed or determinable on the date of grant, must for that calendar year file Form 3922 for each transfer made during that year. Information to be reported includes the date the option was granted, the date the option was exercised, the fair market value per share on the grant date, the fair market value per share on the exercise date, the exercise price paid per share, the number of shares transferred, the date legal title transferred, and the exercise price per share determined as if the option was exercised on the option grant date.

For purposes of Forms 3921 and 3922, the term “corporation” includes, but is not limited to:

  • The corporation issuing the stock
  • A related corporation
  • Any agent of the corporation
  • Any party distributing shares of stock or other payments in connection with the plan (for example, a brokerage firm)
  • Any party in control of the payment of remuneration for employment to the employee

These information returns are due by February 28, 2011, if filing on paper, or by March 31, 2011, if filing electronically. Additionally, a copy of each form filed must be provided to the employee.

Contact Us

Mike Czarnota

877.622.2257, x23685

Mariann Krieger

248.375.7220