Is the exercise spread of NQSOs subject to federal unemployment taxes?
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.