Treasury Announces Moratorium on Stock Option Withholding

On Tuesday, June 25, the Treasury Department announced that it would postpone indefinitely the collection of Social Security and Medicare tax on incentive stock options (ISOs) and employee stock purchase plans (ESPPs).

Last November, the Internal Revenue Service issued guidelines for withholding tax on these two popular forms of compensation. Since that time, both the Senate and the House have made attempts at overturning the legislation. Also, the IRS held a public hearing recently at which many members of industry spoke out against the action.

The new withholding rules were scheduled to go into effect on January 1, 2003. It is estimated that the withholding would bring in an additional $23 billion to the federal government over the next 10 years.

Should the withholding plans be implemented in the future, Pam Olsen, the Treasury Department's acting assistant secretary for tax policy, indicated that employers will have an additional two years in which to implement a plan for collection of taxes on these incentives.

You may like these other stories...

IRS must take oath on Lerner emails: judgeMackenzie Weinger of Politico reported on Thursday that a federal judge ordered the IRS to explain under oath how it lost emails connected to Lois Lerner, the ex-IRS official at the...
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.