STOCK: The bank will be sending out 1099 forms early next year (see chart below) for all proceeds paid in the current year

OPTIONS: Non-employee optionholders vs. former or current employee optionholders 

• Non-employee optionholders may receive their payment from the Paying Agent or the company, and would receive a 1099 form.
• Current or former Employee optionholders receive payment from the surviving corporation or Buyer and would receive a W-2 tax form, even after they leave the company. For employee optionholders, please contact your company’s payroll administrator if you have not received your tax form for the prior year.

Tax forms are generated at different times and therefore may not yet be available.  The estimated deadline dates provided below will apply to the vast majority of forms generated.  Please note that certain variables could require deadlines to be extended up to 30 days.

STOCK: There are two cases where the bank is required to withhold taxes. First, on dividends for anyone that does not have a certified Tax Identification Number (TIN) or Social Security Number (SSN) on record. If you would like to provide a tax form in order to certify your TIN or SSN, please print the online form and send it to the Paying Agent. Second, the bank is also required to withhold taxes for anyone for whom the IRS has sent a B Notice or a C Notice.

Non-employee optionholders and former or current employee optionholders are often paid in different manners. When distributions are made at closing (or post-closing for escrow releases and earn-outs), non-employee optionholders may receive their gross payment from the Paying Agent and would receive a 1099 form.  Employee (current or former) optionholders will likely receive payment (net of applicable withholding) from the surviving corporation or Buyer and would receive a W-2 tax form, even after they leave the company.  For further details on taxes withheld, employee optionholders should contact the company’s payroll administrator.

Cost basis is the initial cost of a security, adjusted for stock splits, spinoffs and non-dividend distributions. It is used to determine the amount of the gain or loss at the time of a sale or exchange.

In order to receive information on your cost basis, our support team may be able to provide you with a breakdown to the extent we were provided with such information at closing. Otherwise, if we were not provided with this information, we suggest contacting the company to see if they are able to locate these details.  Should you have questions about the tax implications associated with the cost basis, we recommend you consult with your tax advisor, as there are a variety of factors that can impact tax liability.