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IRS offers guidance on 5-year tax deferral for stock options

Source: accountingtoday.com - Dec 10, 2018

The Internal Revenue Service provided initial guidance Friday on a provision of last December’s tax overhaul enabling qualified employees of private corporations to defer paying income taxes for up to five years on the value of qualified stock options and restricted stock units granted by their employers.
IRS building sign

However, the provision of the Tax Cuts and Jobs Act comes with a catch. In general, executives, highly compensated officers and those owning 1 percent or more of the corporation’s stock can’t make the deferral election. The IRS noted that Federal Insurance Contributions Act tax and Federal Unemployment Tax Act tax payable on the value of qualified stock cannot be deferred.

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Category: General Business