Withholding on Equity Awards: Mastering Complex New FASB ASC 718 Standard and IRS Requirements
Recording of a 110-minute CPE webinar with Q&A
Conducted on Thursday, March 30, 2017
Recorded event now available
This webinar will provide corporate tax professionals to U.S.-based multinational corporations that withhold on equity awards with a detailed, practical and thorough guide to answer questions regarding U.S. income tax withholding rules applicable to equity compensation and how FASB ASC 718 update impacts corporate tax management.
A recent change in financial accounting standards (FASB ASC 718) results in questions regarding the U.S. income tax withholding rules applicable to equity compensation. The accounting standard update is generally effective 2017 for calendar year public companies.
Some employers are under the impression that employees can now simply request withholding on equity compensation at the highest marginal individual income tax rate, currently 39.6%. However, this is not as simple as it appears because detailed rules and regulations—and plan provisions—may limit withholding options.
The IRS takes the position that the only ways to withhold on supplemental wages of less than $1 million per year are the supplemental income withholding rates or the aggregate method. Employers and employees alike are wondering whether withholding on supplemental income at the statutory maximum income tax rate is possible. Outside of the mandatory withholding requirement of Reg. 31.3402(g)-1(a)(2) for supplemental wages over $1 million, a 39.6% withholding rate is not expressly permitted.
The Service has for many years strenuously objected to the use of any such informal “work around” to avoid the strictly applicable federal income tax withholding regimes.
Listen as the panel provides tax executives and professionals with practical guidance for businesses that want to withhold federal income tax at a rate higher than the minimum withholding rate through use of the aggregate method and Forms W-4. The panel will also review and explain the impact of plan and grant documents on federal income tax withholding on equity compensation.
- IRS equity compensation withholding rules
- Types of wages
- Overview of supplemental wages
- Permissible withholding methods
- Supplemental wage thresholds (<$1M, >1M)
- Form W-4
- State tax considerations
- Payroll practicalities
- FASB ASC 718 and impact on tax withholding
- Methods of withholding on equity awards
- ASC718 requirements for net share settlement
- Withholding changes under Notice ASU 2016-09
- Non-US watchpoints
- Plan terms and grant documents
- Plan term amendments
- Withholding of shares and materiality threshholds
- NYSE and Nasdaq on plan amendments
- ISS on plan amendments
- Communication with broker/administrator and employees
The panel will review these and other key issues:
- What are the changes that impact corporate tax management due to FASB ASC 718?
- What are the detailed applicable withholding rules?
- Supplemental wages and withholding employment taxes
- What is the permissible method under IRS regs to withhold on supplemental wage exceeding $1 million?
- What are the two permissible methods to withhold for supplemental wages below $1 million?
After completing this course, you will be able to:
- Identify the types of wages subject to FASB ASC 718
- Establish permissible methods of income tax withholding
- Ascertain a permissible method of tax withholding
- Discern the impact on tax reporting due to a use of a nonpermissible method
Barbara Baksa, Executive Director
National Association of Stock Plan Professionals,
Ms. Baksa is a frequent speaker on equity compensation related topics, has authored numerous white papers and articles on stock compensation and has contributed chapters to four books on equity compensation. She is the author of the book Accounting for Equity Compensation, published by the National Center for Employee Ownership and a required text for the Certified Equity Professionals exam. She also serves as editor of The NASPP Advisor and co-editor of The Corporate Executive. She oversees all NASPP member programs and services, including the NASPP Annual Conference, online educational programs, webcasts on current developments, website content, surveys and research, regional chapters, and industry involvement.
Marlene Zobayan, Partner
Palo Alto, Calif.
Ms. Zobayan has over twenty years of international tax and benefits experience, including global equity plans, mobile employee taxation, global compensation and benefits. She provides a range of services to her clients, including global equity plan design, tax reviews and tax optimization, assistance with local approvals and filings, communications, and designing administrative processes. She is a regular speaker and author on global stock plan and rewards issues. Prior to joining Rutlen Associates, she was the practice leader on the West Coast for Deloitte Tax's Global Rewards group and managed their news alerts for global equity plan changes.
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Strafford is an IRS approved continuing education provider and this course is approved for 2 enrolled agent (EA) credit hours.
I found the presenters to be very experienced and the Q&A's to be particularly useful.
American Eagle Outfitters
The webinar was fast paced and comprehensive.
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The program had excellent presenters that were extremely knowledgeable.
Lisa R. Volland
I liked the clear and concise manner in which the topics were presented.
General Electric Company
Corporate Tax Advisory Board
Director of Multistate Tax Services
Tax Research Analyst
ADP Tax Credit Services
Manager of Domestic Taxes
Partner, National Tax Practice
Garippa Lotz & Giannuario
Joseph Geiger, Esq., CPA
VP & Management Consultant
Marvin F. Poer & Co.
Tax Group Partner
Crowell & Moring
Senior Manager, Local Taxes
Advanced Micro Devices
Director, Location Incentives Group
Cushman & Wakefield
Marvin F. Poer & Co.
Faegre & Benson
Professor of Tax Law
University of Connecticut
Richard J. Prem
Vice President, Indirect Taxes & Tax Reporting
M.R. Press Consulting
Manager of Property Tax
Level 3 Communications
Tax Research Manager
ADP Tax Credit Services
Managing Director & National Leader, Federal Tax Credits & Incentives
Zaino Hall & Farrin
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