When restricted stock is given to employees, they don’t have to report the grant of this stock as income currently; income it is deferred until restrictions are lifted (typically after a set number of years) and the stock becomes vested. Then the current value becomes taxable compensation. But employees can elect to include the value (probably very little) in income as compensation when the restricted stock is granted, which allows future appreciation to eventually be turned into capital gains. This election must be made within 30 days of receiving the grant. The IRS permits Form 15620 to be filed online. #IdeaoftheDay
Barbara Weltman
Big Ideas for Small Business, Inc.
Subscribe and download for Free our newly-updated eBook, "150+ Tax Deductions for Small Business A to Z" Revised to reflect changes in the One Big Beautiful Bill
Footer
Small Businesses Struggle with Job Openings as Hiring Plans Rise