GTN Mobility Tax Blog

Equity plan program managers and participants have likely heard of an 83(b) election (“Election to include in Gross Income in Year of Transfer”), but often its application and advantages are misunderstood. Section 83 of the Internal Revenue Code (IRC) governs several tax functions when determining the tax consequences of transfers of restricted property such as equity or stock. These special rules determine whether an employee has income resulting from a transfer of property, when an employee will recognize taxable compensation, and how much taxable compensation will be recognized. 

This article was originally published in Spiceworks.

Employees are moving, and technology infrastructures need help to keep up. An AIRINC survey found global mobility activity has increased for 60% of companies in the last year. However, only 14% of those company leaders say they “strongly agree” that they have the right technology to meet the general administrative needs that spring out of their mobility programs. That figure must change if organizations want to avoid tax compliance and immigration headaches.

As we approach the end of another year, businesses are navigating the intricate landscape of year-end payroll, with a particular emphasis on the unique challenges posed by the evolving nature of remote and mobile work. Over the past few years, we have witnessed a significant change in thinking about work dynamics, with remote and mobile employment becoming more prevalent than ever. Consequently, mobility and payroll professionals are faced with a set of challenges that demand a nuanced approach to ensure accuracy, compliance, and employee satisfaction.

For the global mobility industry, 2023 has witnessed both significant challenges and exciting opportunities. Although continuing to ease, inflationary pressures and higher interest rates have had an impact on employees’ willingness to relocate. Ongoing conflicts in Ukraine and the Middle East have created humanitarian and security crises that will have long-lasting impacts on global economies and welfare. At the same time, advancements in automation and artificial intelligence offer the possibility of transformative change, including opportunities in the creation of administrative efficiencies and in the reduction of cost and risks.

As the year is drawing to a close, global mobility and payroll teams are focused on US W-2 reporting, specifically to make sure global compensation and expense reimbursements, such as tax reimbursements, housing, and tax preparation services, have been reported appropriately for their mobile employees on long-term assignments. While this focus is crucial, it often overshadows a critical aspect of payroll reporting compliance. In the rush to ensure the tax efficiency of international assignments, there's a tendency to overlook the nuances of reporting for permanent transfers.

Any company with a mobile workforce needs a solid technology platform to effectively manage their mobility program. This technology often includes features such as dashboards that provide near-real-time monitoring of an employee's tax information, portals that allow taxpayers to upload tax documents, and tracking capabilities that help monitor mobile employee locations. And now in the age of ChatGPT and other generative AI tools, it's more important than ever to utilize technology to streamline and strengthen your mobility program. However, simply having access to technology and information is rarely enough to address the tax compliance challenges that often come with a mobile workforce.