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Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.

ESPPs: Rules

What is the longest the offering period can be?
The maximum ESPP "option" term (i.e., offering period) is 27 months for plans with a lookback feature but is five years for plans that use only the purchase date stock price (i.e., the up-to-15% discount is applied only to the end-of-period stock date price). Plans often provide for multiple purchase periods (e.g., six months) within a long offering period.
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