Happy New Year! I figure I can get away with saying that for at least a bit longer. In between emerging from holiday celebrations and diving into year-end and tax reporting season, we always like to squeeze in some celebrating here at the NASPP. In what’s becoming my annual celebratory blog, I invite you to share in the congrats.
Question of the Week Winner!
Kudos to the winner and runners up of our Question of the Week contest. For those of you who are asking “What’s the Question of the Week Contest?“, it’s a weekly quiz challenge designed for stock plan professionals to test their know-how in a variety of areas, while competing against their peers. Hone your equity compensation knowledge while having fun at the same time! There’s a new question each week, and a correct answer earns points.
And the Winners Are…
A big congrats to screen name alias Flower power 121 for coming out on top of our 2014 contest. The screen names of the top 5 scorers are:
- Flower power 121
- mamaandmore
- DMekwunye
- Lucky13
- CEP123
What’s in a Name?
In reviewing the scores from last year’s challenge, I couldn’t help but observe the originality of some of the screen names users are deploying in our contest. It seems nothing was off limits, from the range of “equity” and “stock” possibilities (Bob: Maximum Supreme Commander Equity Department, Got Equity?, cephopeful, StockNewbie, EquiDude) to the patriotic (Starspangled) to impersonators (Piglet, Tigger, Popeye, Truman and Jane Austen) to those who tell it like it is (Don’tKnowNuthin and IthinkUKnow). Of course our sports fans were abundant as well (HokieNation, bbcoachdan, RedsFan, Patriots Fan, NY_Yankee), in addition to a few that would probably require a happy hour and some time to explain (catfiend, Burger Monster, AwesomeSauce, Come on Gus!).
Work Hard, Play Hard
We’ve just reset scores and this week’s challenge starts a whole new contest, so this is the perfect time for NASPP members to sign up, create your screen alias and jump into the Question of the Week Contest. We leave all of January’s questions active for the entire month, so you have plenty of time to complete the first quizzes of the new game.
Equity Expert Podcast
One milestone we’re recognizing is the anniversary of our NASPP podcast series: Equity Expert. That’s right, you can download short episodes right to your computer, smartphone or other device and listen to them at your leisure. This series focuses on short interviews with some of the industry’s best and brightest on a variety of equity compensation topics. Shorter than webcasts, they are designed to give you the quick run down on details you need to know. We’ve posted 12 episodes so far, and hope to double that to 24 more in 2015! Be sure to subscribe in order to get updates on new episodes.
Social Status
Last year when I wrote this early January blog, we were celebrating our 400th LinkedIn follower. At the time of this blog, we’ve passed the 900 follower mark – more than double the number we had just a year ago! We’ve got lots of great content posted to our social media pages, so be sure to like/follow us on LinkedIn, Facebook and Twitter!
New Year’s Resolutions
Let’s face it – lots of us make them and many of us break them. I’m the first to admit I’m not the best at following through on keeping my New Year’s resolutions. One thing I’ve learned is that those who publicly declare their resolutions are more likely to keep them (peer pressure maybe?). In case you missed it, the NASPP has already captured the resolutions of some of our members – check them out and be sure to add your own in the comments! Our Executive Director, Barbara Baksa, hopes to include a cat video in every presentation she prepares this year (I’m looking forward to seeing that happen). I’ll publicly put two of mine out there – on the personal side I intend to walk a cumulative 500 miles this year in an effort to maintain my health. On the NASPP side, we are going to post at least 24 new podcast episodes to our series this year, so be sure to subscribe so you don’t miss out. And, in trying to motivate us all to stay true to our goals for 2015, I will post intermittent progress reports
I think that’s enough celebrating for now – time to get back to work (in my case, working on those 24 podcast episodes!). I wish all of you an incredible year.
-Jenn
Renew Your Membership
All NASPP memberships expired on December 31, 2014. We have some great programs planned for this year; if you haven’t already, renew your membership today so you don’t miss out!
New Podcast: Workforce on the Move!
We posted a new podcast with Nancy Mesereau of Morgan Stanley on mobile employees. Listen to it today!
What’s Your New Year’s Resolution?
What goals do you plan to tackle in 2015? Listen to our New Year’s resolutions and let us know yours at Naspp.com/NewYear.
To Do List
Here is your NASPP to do list for this week:
– Barbara
Tags: NASPP To Do List
To start off the new year, I have a few reminders for Section 6039 filings for ISO and ESPP transactions.
Deadlines
Participant statements need to be furnished by February 2, 2015 (normally the deadline is January 31, but that’s a Saturday). Paper returns need to be filed with the IRS by March 2 (February 28, the normal deadline, is a Saturday) and electronic returns need to be filed by March 31 (this deadline applies regardless of whether electronic filing is on a mandatory or voluntary basis).
Extensions
It’s easy to get an extension for filing the returns with the IRS; log into the IRS Fire system and complete Form 8809. So long as you do this by the deadline, you get an automatic 30-day extension—no questions asked. It is harder to get an extension for the participant statements. You can’t use Form 8809 for this; you have to write a polite letter to the IRS explaining why you need the extension and hope that they grant it to you. See pg 13 of the “General Instructions for Certain Information Returns” for details of what you need to say in the letter and where to send it. The extension is not automatic, so you’d best get on this right away if you think you’ll need one.
Substitute Participant Statements
You can create a substitute statement for participants that lists all their transactions on one page, rather than a separate form for each transaction. You still have to use the IRS terminology, but you can include your own statement that explains what all the words mean (or even annotate the statement itself). But you can’t include any slogans or taglines on the form and if you are going to include your company logo, you have to comply with specific guidelines explained in IRS Publication 1179 (see pg 6). The IRS is serious about this—they are worried your logo might make the form look like junk mail—so it might be best to skip the logo.
Rounding
Shares and dollar amounts have to be rounded in electronic filings (to the nearest whole share or penny, respectively). The IRS says to use a true round for share amounts (that’s rounding down for .4 and under, up for .5 and above). They don’t specify how dollar values should be rounded but since they recommend a true round for share amounts, it’s probably reasonable to use the same approach for dollar values (that’s also how dollar values are rounded on other tax forms (e.g., tax returns). But other approaches might be reasonable as well; I’m fairly certain the IRS isn’t that concerned about how you round. Just be consistent.
Employee ID Number
This needs to be the employee’s tax ID number. Also, you can’t truncate it or mask it on the participant statements. The IRS eventually checks to make sure the number is correct and you’ll have to pay a fine if it is wrong. But they won’t get around to checking until you are in the maximum penalty period. So be smart and run a TIN matching program on your returns before you file them with the IRS.
Account Number
For our purposes, think of this as a transaction number. You can use any system you want to come up with the number (and it can include letters as well as numbers), but you need to assign a unique number to every transaction reported. If you later have to file a correction, this number is how you will identify the transaction being corrected.
Names
Don’t include any special characters in employee names other than hyphens and ampersands.
Just a Few Filings?
Even though you only have a handful of filings, you cannot download the form from the IRS website and fill it out or gin up a form that looks similar in Word and use that to file your returns. The IRS has all sorts of fussy requirements for returns filed on paper, including that they be printed on special paper with special ink. If you don’t want to pay a third party to help with this, you have to order the paper forms from the IRS and wait for them to send them to you. Then you need to scare up a typewriter or print very very neatly. There are tools that are quite affordable that can be used to file even just a handful of forms—personally, I think this approach would be easier than finding a typewriter. Email me and I can send you a list.
Read the NASPP article “Figuring Out Section 6039 Filings” for more tips. Another great article to check out is “6039 Gotchas” by My Equity Comp. Many happy returns!
– Barbara
Tags: ESPP, ESPPs, Form 3921, Form 3922, ISO, Section 422, Section 423, Section 6039, tax reporting, U.S. tax reporting
The Philadelphia NASPP chapter holds the first chapter meeting of the year on Tuesday, January 6, at 8:30 AM. The meeting will feature a presentation on “Post-Vest Holding Periods: The Intersection of Corporate Governance, Plan Design, and Financial Accounting.” Attendees will also be treated to a studio tour of the QVC headquarters.
Tags: NASPP chapter meetings