Year End: Non-statutory Stock Options

Non-statutory Stock Options

The fair market value of stock, over the exercise price of the option grant.

See IRS Publication 15-B, Employee Stock Options, for more information.

How to set up a Stock Options earning code

Navigate to: Company Settings > Payroll Setup > Earnings Codes

If the code isn’t already set up on the company, click "Add New Earning Code" in the upper right corner.

In the Roll up Earning box, select “Regular”. You should now see this box:

Select "OK"

Rename the Earning code and change the W2 Box Type to the following setting:

Click "SAVE".

For Federal taxes, Non-statutory Stock Options are taxable for FUTA, FIT, and FICA.

Each state’s income tax, local tax, and worker’s compensation taxation varies – get the taxability from the client.

Purpose: This document Outlines how to Add a Stock Options Earning code for YE reporting on form W2