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I'm 90% certain that "taxing stock options upon vest" only refers to non-qualified stock options. ISOs, which the majority of startup tech employees with incent
by seattle_spring 9y ago
I'm 90% certain that "taxing stock options upon vest" only refers to non-qualified stock options. ISOs, which the majority of startup tech employees with incentive options get, would not be taxed upon vest.
RSUs and NQOs would fall under the new definition, and holders would be screwed. I just want to make sure we all have our definitions straight.
- kelnos 9y agoThis doesn't really affect RSU vesting much for publicly-traded companies. Under the current regime, RSUs are taxed on delivery; for a publicly-traded company RSUs are usually delivered at vest time. I don't object to taxing NSOs at vest time all that much; for rank-and-file employees ISOs are the norm, and NSOs are usually for highly-compensated execs whose grants easily pass the ISO per-year vesting cap. They're the kinds of people who are likely to be able to afford these taxes without liquidity, and who are probably able to take advantage of a bunch of other tax loopholes anyway. The downside there is for companies that give employees more than 90 days after termination to exercise their ISOs (which by law must be converted to NSOs after 90 days)... I imagine that conversion might trigger a taxable event under these new laws.