What are the company’s reporting requirements for NQSOs?
May 12, 2003
Date: Wed, 2 Jan 2002
As an employer, we have an employee that exercised her stock options at the end of 2001. This is a first occurrence for our company and we did not have the reporting set up with our payroll company. Can we report the information on a 1099-Misc? If so, should it be reported in Box 3? Thanks for your help.
No. Assuming this was a non-qualified stock option, the income should be reported on Form W-2. The ordinary income is subject to payroll taxes. You might need to prepare amended payroll tax returns and Form W-2c (corrected Form W-2). See your accountant for help.