What Information is Required to File Form 3922?
- 1. Corporation Details: EIN, Name, Address
- 2. Employee Details: EIN, Name, Address
- 3. The fair market value (FMV) on the date that the option was granted
- 4. The fair market value (FMV) on the date that the option was exercised
- 5. The number of shares that were transferred
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Frequently Asked Questions on Form 3922
What is IRS 3922 Tax Form?
Form 3922 is used to report certain information about stock incentives and transfers that are made or offered by a corporation during a calendar year. When corporations offer Employee Stock Purchase Plans (ESPP) to their employees and their employees' purchase stocks, this must be reported to the IRS.
There are three copies of Form 3922:
- Copy A must be filed with the IRS
- Copy B must be distributed to the employee that exercised the stock option
- Copy C should be maintained for the corporation’s records
What information is reported on Form 3922?
A wide variety of information is reported on Form 3922, regarding the transfer of stocks to an employee through an Employee Stock Purchase Program (ESPP). Some of this information includes, when the offer was made, and what the fair market value of the stock was at this point. The corporation must also report when the employee exercised their option to purchase the stock, and what the fair market value was at this time. They must also report the date that the stocks were legally transferred to the employee.
When is the deadline to file Form 3922?
There are a few different deadlines where Form 3922 is concerned. The deadline to distribute employee copies is January 31st. The deadline to file paper copies with the IRS is February 28th, and the deadline to file electronically with the IRS is March 31st.
It is important to note that when a company plans on filing paper copies of an IRS tax form, they are only able to do so if there are less than 250. Otherwise, electronic filing is required.
Who Must File Form 3922?
Corporations that offer their employees stock options through an Employee Stock Purchase Program (ESPP) are required to report when their employees purchase stock, as the legal title transfer is made.
These corporations must report specific information regarding the price and transfer of the stock. In addition to filing a copy of this form with the IRS, corporations must also distribute copies of the form to their employees for their own records.
What are the Penalties for not Filing of Form 3922?
The IRS penalties for filing Form 3922 late or failing to file altogether can vary. The IRS can charge anywhere from $50-$280 per form depending on how late it is filed or if the corporation neglected to file at all.