GTN Mobility Tax Blog

Attracting and retaining skilled workers in today’s tight labor market takes more than a competitive salary. Many companies find they can meet their employment needs and their employees’ incentive preferences by offering a portion of their compensation as equity.

You likely know by now that employees who receive equity-based compensation, and who relocate—domestically or internationally—during the life of the award, create tax withholding and reporting obligations.

Still, when it comes to equity reporting and withholding, companies do not always address the risk with their mobile workforce. Often this comes down to a lack of manpower, information, or technology. 

So, how do you move from the stage of recognizing the problem to finding and implementing a solution?

In an ever-evolving global landscape, staying informed about mobility tax is crucial for HR, global mobility, and global tax professionals. This summer, AIRINC and Global Tax Network joined forces to bring you a comprehensive three-part webinar series designed to keep you at the forefront of mobility tax developments.

This article was originally published in Spiceworks.

Starting in May 2024, the US Securities and Exchange Commission’s new, shorter settlement cycle kicks in—and it could leave businesses scrambling. HR, payroll, tax, and equity teams will have one fewer day to deliver shares and manage the related equity compensation tax implications. Plus, when the settlement window is shortened, it will focus more on the complexity of managing a mobile workforce. 

However, these new settlement cycles could serve as the wake-up call businesses need to jump-start much-needed technology upgrades. Why is the SEC’s rule so important for companies that offer equity compensation, and how can technology protect against tax violations, lost compensation, and burnout in this new environment? 

The Securities and Exchange Commission (SEC) has introduced a new rule that significantly impacts the settlement process for popular equity plans offered to employees, such as stock-settled Restricted Stock Units (RSUs) subject to tax withholding, and stock option/stock appreciation right exercises involving same-day sales. Effective May 28, 2024, the settlement cycle will be shortened from two business days after the transaction date (T+2) to one (T+1).

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.