Hi, I'm Phil Figler. I'm an enrolled agent in NoCal, California. My company is called Phil Tax. You can learn more about us on our website, wwlp.com. This video clip is going to be the first in a series of four about employee stock options. We're calling this Stock Options and Taxes 1A, and it's going to be about non-qualified or non-statutory stock options. Now, if you're watching all the videos, you can watch them in any order you please. It doesn't matter. Although, you may want to take a look at the introductory video, which is sort of a summary of what it's all about and what's going to happen in the four. So now we run non-qualified or non-statutory stock options. These are probably the easiest ones to report on your taxes. They tend to be taxable at the point of exercise, which is when you buy the stock, and they are ordinary income, that is wages. They will be subject to all the same taxes the wages are subject to. Your income from these stock options comes from whatever the difference between the fair market value of the stock on the day you exercised and your option cost is. We like to call this the bargain element. The bargain element is what becomes taxable as wages. An interesting fact about nq's is that it's about the only stock option that you do not have to be an employee to receive. A 1099 contractor may receive them as well. So, if you're an employee, it's going to be wages, it's going to be in your w-2. If you're an independent contractor, it's going to be 1099 income and it's going to be in your 1099. If you are an employee and have a w-2, that will be coded as "code E" in 14...
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Non qualified stock options 1099 misc Form: What You Should Know
Dec 14, 2025 — Income taxes would have been withheld. In that case, you would Dec 16, 2025 — On the 1099 tax form, your employer would report 2,000 as income to Dec 24, 2025 — Your income would be 1,000 more than the prior tax year. If there were no payments and no income from stock sales, then you would need to complete and file Form 1099-MISC. Non-qualified stock sales (box 15) If you don't file Form W-2 for any share sales and no income is earned from the sale, you have to file Form 1099-MISC (box 8). Here is an example of tax consequences of nonqualified stock sales on December 17, 2018: You bought stock in January 2025 from an unincorporated association. At the close of business on December 17, 2018, this stock changed hands. Jan 15, 2018 — You completed Form 1099-MISC. Your gross income was 2,000. You are responsible for filing Form 1099-MISC on March 25, 2019. Feb 4, 2025 — If you don't file Form 1099-MISC or don't report any income with a positive tax credit, the 2,000 gross income will be taxable.
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