NQSO

The IRS has shortened the time in which employers must deposit payroll taxes related to certain stock-settled awards issued to employees, in order to be eligible for an administrative waiver of late-deposit penalties.  Through a non-publicized change to its Internal Revenue Manual, the IRS has shortened the applicable deadline for depositing owed and accumulated employment taxes related to stock-settled awards from three business days after exercise (T+3) to two business days after exercise (T+2), while also expanding the administrative waiver’s applicability to additional types of awards.  This change occurred a mere eight days after General Legal Advice Memorandum, GLAM 2020-004, which we discussed earlier this month, was issued to IRS Examination explaining the timing of income rules and the deposit requirements applicable to certain stock-settled awards, as well as the history of the long-standing administrative waiver dating from 2003.
Continue Reading IRS Revises Administrative Waiver for Late Deposit Penalties Arising from Employment Taxes on Stock Options, SARs, and RSUs