Form 3922 must be filed by corporations when an employee acquires stock through an employee stock purchase plan (ESPP) at a discounted price. The IRS requires this form to be filed annually and a copy provided to the employee.
To remain in compliance, it's important to file Form 3922 with the IRS by the due date and furnish recipient copies on time. Failure to meet these deadlines may result in penalties.
What is Form 3922?
Form 3922, "Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c)," is used by corporations to report the transfer of stock acquired by an employee through a qualifying Employee Stock Purchase Plan (ESPP).
This form provides the IRS and employees with essential details such as the grant date, exercise date, purchase price, and the stock's fair market value. These details are vital for determining the correct tax treatment when the employee sells the stock in the future.
Key Dates for Filing Form 3922
If your business transfers stock to an employee under an Employee Stock Purchase Plan (ESPP), you're required to report this transaction using Form 3922. Meeting IRS deadlines is essential for compliance.
Here are the key dates for the 2024 tax year:
| Filing type | Deadlines |
|---|
| Sending employee copy | January 31, 2025 |
| Paper filing | February 28, 2025 |
| IRS e-filing | March 31, 2025 |
Penalties
| Scenario | Penalty per return | Penalty for small businesses | Penalty for large businesses |
|---|
| Failure to file on time | $60 | $239,000 | $683,000 |
| after 30 days before August 1 | $140 | $683,000 | $2,049,000 |
| after August 1 or not filed | $340 | $1,366,000 | $4,098,500 |
| Intentional Disregard | $680 | No limit | No limit |
Filing Form 3922 with TaxZerone
Step 1: Login to your TaxZerone Account
Step 2: Choose Form 3922 and the tax year, then enter the required details for the corporation and employees, including their names, addresses, TINs, and stock purchase plan information
Step 3: Submit the form to the IRS and deliver the employee’s copy through ZeroneVault or send it by postal mail.
