Are you required to work full time to get incentive stock options?

July 25, 2001

Subject:   full-time employee requirement?
Date:   Fri, 19 Jan 2001
From:   Jay

I am planning to reduce my hours from 40 a week to 30 or 35. My employer has said that my ISO will be taken away if I do this because of the law. Is this correct?



Date:   9 Feb 2001

Hello Jay,

There is no full-time employment requirement in the Internal Revenue Code to receive or retain incentive stock options. You are only required to be an employee of the corporation granting the option, a parent or subsidiary corporation of the corporation, or a parent or subsidiary corporation of the corporation issuing or assuming a stock option in certain transactions. (IRC Section 422(a)(2).)

However, your employer’s plan may place restrictions on your options beyond those in the Internal Revenue Code.

This may be a matter you need to review with an attorney.

Good luck!

Mike Gray

For more information about incentive stock options, request our free report, Incentive Stock Options – Executive Tax and Financial Planning Strategies.

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