nonqualifying stock option

Nonqualifying stock option

An employee stock option that does not satisfy IRS qualifying rules and therefore is liable for taxation upon exercise .

Nonqualified Stock Option

Any employee stock option that does not meet with IRS requirements for preferential tax treatment.

nonqualifying stock option

An option to purchase stock that does not meet certain requirements established by the Internal Revenue Service for favorable tax treatment. Acting on a nonqualifying stock option results in taxable ordinary income on any gain made during the year the option is exercised.