Resource

Year-End Resources for Administrators and Participants

November 13, 2024

The end of the calendar year is a pivotal time for stock plan administrators and participants alike. The intricate interplay of tax reporting, equity compensation management, and strategic financial planning can make this period rather challenging. But with the proper resources and the right approach, both admins and participants alike can navigate the complexities of year-end effectively and efficiently.

In this article, we'll be highlighting some of the resources we have available, to help guide you and your stock plan participants smoothly through the complexities of year-end planning and processing. 

Understanding the Year-End Landscape

For stock plan administrators, year-end preparation involves tax compliance, precise record-keeping for audits, and proactive communication with plan participants. These steps ensure compliance with IRS and SEC regulations while also fostering a smooth experience for employees.

For participants, year-end is an opportunity to evaluate their financial strategies and understand how their equity awards impact their overall tax and financial positions. Clear guidance and preparation can help them maximize the benefits of their equity compensation and foster a sense of trust between your employees and the company.


For Stock Plan Administrators
As Admins we need to juggle various reporting requirements depending on the equity type, participant category, and jurisdiction. Key forms include:

  1. Form W-2: For employees, taxable events such as NSO exercises, RSU vesting, and ESPP purchases resulting in income must be reported as wages​​.
  2. Form 1099: Consultants and other non-employees who receive equity compensation must have their income reported here​.
  3. Forms 3921 and 3922: Required under Section 6039 for ISOs and ESPPs. These forms provide employees and the IRS with transaction details to ensure accurate tax filing​​.

Resources:

An important resource you'll want to check out is our NASPP webinar: Guide to Tax Reporting for Equity Plans where you'll gain a deep understanding on the following key topics:

  • What goes on Form W-2 for stock plan transactions?  

  • When should you use Form 1099?   

  • What are the deadlines for reporting income and taxes withheld for 2024?  

  • What’s needed for Section 6039 reporting? 


And if the below questions are those that you're currently struggling with:

  • What are the key differences between administrative and financial reporting requirements? 

  • How can you reduce errors and save time by improving year-end reporting processes? 

  • What are best practices for data management and compliance?

Then we implore you to check out Best Practices for Accurate and Efficient Year-End Reporting where those questions will be answered in detail by our panel of experts. 

For Stock Plan Participants

When it comes to participants, I've always felt that over communication from the admin side is extremely important. My reason being that while equity is a benefit to employees, it can often times be seen as the opposite and that's usually due to participants not understanding the possible tax implications of their equity compensation.

For this reason, it's important to help your employees understand the potential tax consequences of their awards and how their equity fits into their overall financial wellness. 

So if any of the below questions are striking a chord:

  • What strategies can ERGs employ to effectively communicate the value and potential of equity compensation? 

  • What are common misconceptions about equity compensation among ERG members? 

  • What are the key elements of equity compensation that ERG members need to understand for their financial wellbeing? 

  • What specific challenges might ERG members face in grasping the concept of equity compensation, and how can we address these challenges in our education programs? 

  • What resources and tools can be provided to ERG members to support ongoing learning and decision-making related to their equity compensation? 

Then you'll want to look into our webinar: Empowering ERGs: Equity Compensation and Financial Wellness

Year end is always going to be a challenging time for both parties, but we hope with the resources listed above and the plethora of others we have on the website, you can tackle the end of the year with confidence!

  • Head shot of Jason Mann
    By Jason Mann

    Content Director

    NASPP