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Tax 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.
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Is the exercise spread of NQSOs subject to federal unemployment taxes? | |||
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Yes. There is a federal tax (called FUTA) to help fund unemployment benefits. FUTA is imposed on employers rather than employees, and applies to the first $7,000 of wages paid. Unlike with Social Security and Medicare taxes, employees do not pay a corresponding amount of FUTA, so nothing for FUTA is withheld upon your exercise of NQSOs. Your company pays the tax with IRS Form 940. | |||
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