7548 / What notice, reporting and withholding requirements apply to an employer that transfers to its employees stock options or restricted stock units where gain deferral is possible under IRC Section 83(i)?

Employers that transfer qualified stock options or restricted stock units (RSUs) to qualified employees are subject to certain notice requirements under the 2017 tax reform legislation. Pursuant to the new rules, the company must provide a notice at the time (or a reasonable period before) the employee’s rights are substantially vested (and income would therefore be recognized if no deferral election was made.

The notice must:

(1) certify that the stock is qualified stock,

(2) notify the employee that he or she may elect to defer income recognition with respect to the stock,