Double Vesting Restricted Stock Units
In startups and early-stage companies, founders often receive restricted equity grants as compensation for their services. With some planning, founders can potentially lower the taxes they pay on the appreciation of the...more
Earlier this month, the IRS released Form 15620, a new standardized form for taxpayers seeking to make elections under Internal Revenue Code (“Code”) section 83(b). Previously, to make this election, taxpayers needed to...more
As explained in a prior blog post, an employee who timely files a Section 83(b) election will be taxed on the fair market value of property transferred (typically restricted stock) to him or her in exchange for services on...more
On November 7, 2024, the IRS introduced Form 15620, a new standardized form for taxpayers opting to make a Section 83(b) election. Previously, taxpayers needed to send a letter to the IRS with the required information to make...more
For an employee who is a U.S. taxpayer, both the employer and the employee are liable for a portion of Social Security taxes and Medicare taxes (collectively referred to as “FICA” taxes) on the employee’s compensation. ...more
If you’re reading this, chances are this is not the first time you’ve heard of the 83(b) election (and if it is, then definitely keep reading). The “83” in “83(b) election” refers to Section 83 of the Internal Revenue Code,...more
Many people are forming start-up entities, especially in the Boston and Worcester areas, and for some, it becomes a great success story. For others, it does not. As an attorney who assists many start-ups and investors, I see...more
As an emerging or startup technology company seeking funding, your focus is likely on your product - it is the core of your business. That being said, how you protect your technology and set up the company that owns it can be...more
If Only- Have you ever wondered what trajectory your career or business would have taken had you done something differently? Have you ever wished you could turn back the clock to correct a mistake, to complete an...more
Equity compensation – which links the self-interests of a company’s service providers with the interests of the company and its investors – is a compelling incentive for start-up companies to attract and motivate employees...more
A Section 83(b) election is a short, generally one-page document you send to the IRS to notify them that you wish to be taxed in connection with property subject to a "substantial risk of forfeiture" (more on this below) that...more
Restricted stock units (RSUs) continue to be a popular form of equity compensation. This article covers ten things every compensation professional should know about RSUs. 1. How are RSUs different from restricted stock? ...more
Synopsis - The Internal Revenue Service (IRS) released a Generic Legal Advice Memorandum, GLAM 2020-004 (the IRS Memo) dated May 18, 2020 addressing the timing of income and payroll tax withholding on three types of employee...more
IRS guidance on new law permitting income tax deferral for private company equity compensation awards provides clarity by introducing more rules. The Section 83(i) deferral opportunity is only available for awards granted...more
The IRS adopted final regulations that no longer require taxpayers who have made Internal Revenue Code §83(b) elections to attach a copy of the election to their annual federal income tax return. Under §83, restricted...more
If an individual makes a Section 83(b) election to include in income the value of unvested property (such as restricted stock) that is transferred in connection with the performance of services, the individual must file the...more
Prior to a recent change, in order for a Section 83(b) election to be effective, the taxpayer had to: - File the Section 83(b) election within 30 days of the receipt of restricted property (typically, restricted stock)...more
In an unexpected development, on June 21, 2016, the IRS issued proposed regulations that clarify and modify the final regulations issued in 2007 and the proposed income inclusion regulations issued in 2008. In many cases,...more