Update to Payroll Departments for Large Corporations with Non-Qualified Stock Option Plans
Some corporations have been hit with multimillion dollar penalties for late deposits of amounts withheld for income tax and employment tax purposes from nonqualified stock option (NQSO) exercises. Employers should confirm that any income and payroll tax deposits on NQSO exercises are being made within the 3-day grace period described below. If brokerages are handling the actual withholding, compliance with the 3-day grace period rule may require expediting the collection of withheld amounts from brokers – including any amounts required to be withheld from cashless exercises. View full article (PDF).