Tax Center Global Tax Guide / Glossary / Discussion / Newsletters / About Us
Register Log In
myRecordsmyToolsmyClients
   ESPPs   
Basics   
Rules   
Advanced   
Taxes   
Taxes Advanced   

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

Employee stock purchase plans offer great benefits. Browse an overview of this section below, or explore the subtopics to the left. See also the ESPP sections of the Tax Center.

Test Your Knowledge Test and improve your knowledge with our ESPPs quiz and its study guide in the answer key.

Listen to our podcast on the basics, or watch our videos on the core concepts and benefits, important rules, and tax issues for ESPPs.


  Articles   FAQs  

ESPPs 101: Key Dates And Terms You Must Know

The myStockOptions Editorial Team
Your employee stock purchase plan (ESPP) may be one of the best benefits your company offers. However, to maximize its value, you must know its key dates and terms. This article explains the basics you need to know for your ESPP participation.

VIDEO! Employee Stock Purchase Plans (ESPPs): Core Concepts & Benefits

Bruce Brumberg
In this video, the editor-in-chief of myStockOptions.com explains the fundamentals of employee stock purchase plans (ESPPs). Animated examples clearly illustrate the benefits that ESPPs can provide for employees. Running time: 3:35

ESPPs 101: Taxation Made Simple This is premium content

The myStockOptions Editorial Team
Your employee stock purchase plan may be one of the best benefits offered by your company. However, to appreciate the advantages of enrolling in the ESPP you must understand the tax consequences of participation. This article explains the tax basics.

Are You Taking Full Advantage Of Your Company's Employee Stock Purchase Plan?

Sandra Sussman
Many employees don't take advantage of their companies' employee stock purchase plans (ESPPs). I want to give you a better appreciation of why ESPPs are a good deal.

Six ESPP Essentials (Part 1): Enrollment, Plan Type, Purchase Timing This is premium content

The myStockOptions Editorial Team
An employee stock purchase plan can be a great benefit, but the rules and taxation are tricky. This two-part article presents six topics you must be familiar with to get the most from your ESPP. Part 1 covers enrollment, plan types, and offering/purchase periods.

VIDEO! Employee Stock Purchase Plans (ESPPs): Taxes

Bruce Brumberg
To maximize the benefits of your employee stock purchase plan (ESPP), you must understand the five key tax rules explained in this video. Illustrated by animated examples, the covered concepts include the special rules that depend on how long you hold the shares. Running time: 4:24

VIDEO! Employee Stock Purchase Plans (ESPPs): Key Rules & Decisions

Bruce Brumberg
Presented by the editor-in-chief of myStockOptions.com, this video covers the important rules you must know and the key choices you will have to make when you participate in an employee stock purchase plan (ESPP). Running time: 2:53

ESPP Contribution Limits And Why They Matter To You This is premium content

Bruce Brumberg
NEW! If you are enrolled in a tax-qualified employee stock purchase plan (ESPP), the amount of company stock that you are allowed to purchase is limited. You will want to keep this in mind when you allocate part of your salary to your ESPP. Read this article to understand how the contribution limits affect your ESPP planning.

Six ESPP Essentials (Part 2): Holding Periods, Tax Treatment, Major Corporate Or Personal Events This is premium content

The myStockOptions Editorial Team
Your company's employee stock purchase plan (ESPP) can be a strong financial benefit, but the rules and taxation can be tricky. Part 2 delves into the complicated topics of holding periods, tax treatment, and the impact of various life events on your ESPP participation and holdings.

NEW! Ten Financial-Planning Rules Every ESPP Participant Should Know This is premium content

myStockOptions.com Editorial Team
Employee stock purchase plans (ESPPs) are a super deal. However, the related taxation and financial planning can be deceptively complex. This article presents the essential points that you should understand before you participate in your company's ESPP.

Return to top of page

What is an employee stock purchase plan?

An employee stock purchase plan (ESPP) is a type of stock plan that permits employees to use after-tax payroll deductions to acquire shares of their company's stock. Plans can have...

What are the top 10 questions I should ask about my company's employee stock purchase plan?

Employee stock purchase plans (ESPPs) can be designed in different ways and provided with various features that make them appealing to participants. Before you enroll in your company's ESPP, however, you should be sure to know the answers to the following questions...

NEW! What are the 10 most important financial-planning rules for employee stock purchase plans?

Before you participate in your company's employee stock purchase plan (ESPP), understand the following essential points for financial planning with ESPPs...

What makes a Section 423 ESPP a good deal?

You can purchase company stock at a discount, with special tax treatment when you hold the shares long enough. The deal is even better when your ESPP has...

When I sell my ESPP shares, how will I be taxed if I have met the holding-period requirements under Section 423 for tax-qualified ESPPs? This is premium content

You may have both ordinary income and capital gain when you meet the holding-period requirements (this is a qualifying disposition under the tax code). The answer depends on whether...

If I do not meet the ESPP holding-period requirements to receive favorable tax treatment, how will I be taxed when I sell the stock? This is premium content

If you sell or otherwise dispose of the stock without meeting the holding period rules, then you owe taxes for the spread between the...

How does an ESPP differ from a stock option plan?

Employee stock purchase plans tend to be viewed as a benefit while stock options are a form of compensation. From an employee perspective, there are some differences in operations, eligibility, and design...

If I purchase shares in my company's ESPP or sell the stock in a disqualifying disposition, will I need to make estimated tax payments? This is premium content

You need to pay enough tax during the year through withholding or estimated tax payments to avoid penalties and interest. The tax that has to be paid includes...

Can I ever have ordinary income but no actual gain on sales of ESPP stock? This is premium content

Yes, when the market price of the stock has dropped after purchase and you make a disqualifying disposition of the shares...

What are the benefits of participating in an employee stock purchase plan?

You become an owner in your company, with all the financial upside and risks that any investment can bring. By participating in the plan...

Return to top of page