Nonqualified Stock Options
No tax on grant or vesting. Tax on spread at exercise. Tax on sale of shares. Long-term capital gain rates apply if shares held more than 1 year.
Incentive Stock Options:
No tax on grant, vesting or exercise (except Alternative Minimum Tax may apply to spread at exercise).
Tax on sale (generally, capital gain but ordinary income may apply to portion of gain up to spread at exercise if disqualifying disposition). Long-term capital gain rates apply if shares held more than 1 year.
Nonqualified Stock Options
Yes, on spread at exercise. No reimbursement to parent required.
Incentive Stock Options
Only if disqualifying disposition.
Nonqualified Stock Options
Income Tax:
Yes.
Social Insurance Contribution:
Yes, employer pays its share and withholds employee's share.
Incentive Stock Options
Income Tax:
No withholding.
Reporting of exercise and disqualifying disposition of shares.
Social Insurance Contributions:
No.
Nonqualified Stock Options
Yes, but simple registration (Form S-8) applies for public company plans and exemptions are generally available for most private company plans.
Incentive Stock Options
Yes, but simple registration (Form S-8) applies for public company plans and exemptions are generally available for most private company plans.
While there are no federal data privacy requirements, please note, the California Consumer Privacy Act ("CCPA") became effective as of 1 January 2020. The CCPA imposes a broad range of new requirements for the collection and processing of personal data of California residents.
Other U.S. states may have or may adopt similar data privacy requirements.