Employee Stock Purchase Plan

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Employee Stock Purchase Plan (ESPP)

A plan usually linked to a corporation's payroll deduction system allowing employees to purchase shares at a discount from current market value.

Employee Stock Purchase Plan

An employee benefit that some firms offer allowing employees to use payroll deductions to buy shares in the firm at a discount from their fair market value. The firm offers this to employees at certain times; those who participate in the program allow the payroll deductions to accumulate for a certain number of pay periods. At the end of the period the firm uses the funds to purchase the number of shares worth that amount. The percentage discount varies from firm to firm, but can be as much as 15%.
References in periodicals archive ?
This alert serves as a reminder of certain year-end reporting requirements imposed under Section 6039 of the Internal Revenue Code of 1986, as amended, with respect to incentive stock option exercises and transfers of stock acquired under employee stock purchase plans occurring during 2017.
Employee stock purchase plans (ESPPs) can complement workplace savings plans and provide a way for employees to diversify their retirement investment efforts.
That can be in the form of stock options, employee stock ownership plans (ESOPs), employee stock purchase plans (ESPPs) or similar arrangements.
For stock options, the IRS may look at a number of issues, such as whether there has been proper income inclusion on option exercise (or on a disqualifying disposition of stock acquired from such exercise), participation rights in employee stock purchase plans and general statutory compliance.
For stock options the IRS may look at whether there has been proper income inclusion on option exercise (of on a disqualifying disposition of stock acquired from such exercise), participation rights in employee stock purchase plans and general statutory compliance.
pdf, addresses the FICA/FUTA treatment applicable to statutory stock options--ISOs and employee stock purchase plans (ESPPs).
Forty-three percent of the companies are changing their Employee Stock Purchase Plans as well, typically by reducing the discount employees receive for purchasing company shares.
The forthcoming guidance is also expected to exempt statutory stock options, such as incentive stock options (ISOs) and employee stock purchase plans (ESPPs), as well as bonuses that are paid out within 2-1/2 months after the end of the bonus period.
Notice 2001-14 clarifies the issue of the assessment and collection of FICA, FUTA and income tax withholding on statutory stock options, which include both incentive stock options (ISOs) and employee stock purchase plans (ESPPs), covered under Secs.
For example, if your client acquired stock by exercising stock options, or even employee stock purchase plans, it is possible that over a period of years, some of the stock will qualify and some will not.
The letter informed the Company that, at the time of the notice provided to NASDAQ, the Company was not in compliance with the shareholder approval requirement with respect to employee stock purchase plans set forth in Marketplace Rule 4350(i).
The net effect of this announcement would be to reverse a 30-year tax policy of not subjecting incentive stock options (ISOs) and employee stock purchase plans (ESPPs) to payroll tax withholdings.

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