IRS Form 3921 "Exercise of an Incentive Stock Option Under Section 422(B)"

What Is IRS Form 3921?

IRS Form 3921, Exercise of an Incentive Stock Option under Section 422(b) is a form filed with the Internal Revenue Service (IRS) by corporations that offer their employees an incentive stock option (ISO) described in Section 422(b). IRS Form 3921 is issued by the IRS and was last revised in October 2017. A fillable version of the form can be found below.

What Is Form 3921 Used for?

Any corporation that grants their employees an ISO uses IRS 3921 Form to report the IRS about their transfers of stock made to any transferee when that transferee exercises an ISO under Section 422(b). ISO is a type of employee compensation in the form of stock, which allows the employee to purchase stock, either in the employer's corporation or a parent or subsidiary, usually exercised at a price below the market price.

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Download IRS Form 3921 "Exercise of an Incentive Stock Option Under Section 422(B)"

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Attention:
Copy A of this form is provided for informational purposes only. Copy A appears in red,
similar to the official IRS form. The official printed version of Copy A of this IRS form is
scannable, but the online version of it, printed from this website, is not. Do not print and file
copy A downloaded from this website; a penalty may be imposed for filing with the IRS
information return forms that can’t be scanned. See part O in the current General
Instructions for Certain Information Returns, available at www.irs.gov/form1099, for more
information about penalties.
Please note that Copy B and other copies of this form, which appear in black, may be
downloaded and printed and used to satisfy the requirement to provide the information to
the recipient.
To order official IRS information returns, which include a scannable Copy A for filing with
the IRS and all other applicable copies of the form, visit www.IRS.gov/orderforms. Click on
Employer and Information
Returns, and we’ll mail you the forms you request and their
instructions, as well as any publications you may order.
Information returns may also be filed electronically using the IRS Filing Information Returns
Electronically (FIRE) system (visit www.IRS.gov/FIRE) or the IRS Affordable Care Act
Information Returns (AIR) program (visit www.IRS.gov/AIR).
See IRS Publications 1141, 1167, and 1179 for more information about printing these tax
forms.
Attention:
Copy A of this form is provided for informational purposes only. Copy A appears in red,
similar to the official IRS form. The official printed version of Copy A of this IRS form is
scannable, but the online version of it, printed from this website, is not. Do not print and file
copy A downloaded from this website; a penalty may be imposed for filing with the IRS
information return forms that can’t be scanned. See part O in the current General
Instructions for Certain Information Returns, available at www.irs.gov/form1099, for more
information about penalties.
Please note that Copy B and other copies of this form, which appear in black, may be
downloaded and printed and used to satisfy the requirement to provide the information to
the recipient.
To order official IRS information returns, which include a scannable Copy A for filing with
the IRS and all other applicable copies of the form, visit www.IRS.gov/orderforms. Click on
Employer and Information
Returns, and we’ll mail you the forms you request and their
instructions, as well as any publications you may order.
Information returns may also be filed electronically using the IRS Filing Information Returns
Electronically (FIRE) system (visit www.IRS.gov/FIRE) or the IRS Affordable Care Act
Information Returns (AIR) program (visit www.IRS.gov/AIR).
See IRS Publications 1141, 1167, and 1179 for more information about printing these tax
forms.
VOID
CORRECTED
2525
TRANSFEROR’S name, street address, city or town, state or province,
1 Date option granted
OMB No. 1545-2129
Exercise of an
country, and ZIP or foreign postal code
Form 3921
Incentive Stock
Option Under
2 Date option exercised
Section 422(b)
(Rev. October 2017)
Copy A
TRANSFEROR’S TIN
EMPLOYEE’S TIN
3 Exercise price per share
4 Fair market value per share
on exercise date
For
Internal Revenue
$
$
EMPLOYEE’S name
Service Center
5 No. of shares transferred
File with Form 1096.
For Privacy Act and
Street address (including apt. no.)
6 If other than TRANSFEROR, name, address, and TIN of
Paperwork
corporation whose stock is being transferred
Reduction Act
Notice, see the
City or town, state or province, country, and ZIP or foreign postal code
current version of
the General
Instructions for
Account number (see instructions)
Certain Information
Returns.
3921
Form
(Rev. October 2017)
Cat. No. 41179O
www.irs.gov/Form3921
Department of the Treasury - Internal Revenue Service
Do Not Cut or Separate Forms on This Page — Do Not Cut or Separate Forms on This Page
CORRECTED (if checked)
TRANSFEROR’S name, street address, city or town, state or province,
1 Date option granted
OMB No. 1545-2129
Exercise of an
country, and ZIP or foreign postal code
Form 3921
Incentive Stock
Option Under
2 Date option exercised
Section 422(b)
(Rev. October 2017)
Copy B
TRANSFEROR’S TIN
EMPLOYEE’S TIN
3 Exercise price per share
4 Fair market value per share
on exercise date
For Employee
$
$
EMPLOYEE’S name
This is important tax
information and is
5 No. of shares transferred
being furnished to the
IRS. If you are required
to file a return, a
Street address (including apt. no.)
6 If other than TRANSFEROR, name, address, and TIN of
negligence penalty or
corporation whose stock is being transferred
other sanction may be
imposed on you if this
City or town, state or province, country, and ZIP or foreign postal code
item is required to be
reported and the IRS
determines that it has
Account number (see instructions)
not been reported.
3921
(keep for your records)
Form
(Rev. October 2017)
www.irs.gov/Form3921
Department of the Treasury - Internal Revenue Service
Instructions for Employee
Box 1. Shows the date the option to purchase the stock was
granted to you.
You have received this form because your employer (or transfer
Box 2. Shows the date you exercised the option to purchase the
agent) transferred your employer’s stock to you pursuant to your
stock.
exercise of an incentive stock option (ISO). You must recognize
(report) gain or loss on your tax return for the year in which you
Box 3. Shows the exercise price per share of stock.
sell or otherwise dispose of the stock. Keep this form and use it to
Box 4. Shows the fair market value (FMV) of a share of stock on
figure the gain or loss. For more information, see Pub. 525,
the date the option was exercised.
Taxable and Nontaxable Income.
Box 5. Shows the number of shares of stock transferred to you
When you exercise an ISO, you may have to include in
pursuant to the exercise of the option.
alternative minimum taxable income a portion of the fair market
Box 6. Shows the name, address, and TIN of the corporation
value of the stock acquired through the exercise of the option. For
whose stock is being transferred (if other than the corporation
more information, see Form 6251, Alternative Minimum
shown in TRANSFEROR boxes in the upper left corner of the
Tax—Individuals, and its instructions.
form).
Employee’s taxpayer identification number (TIN). For your
Future developments. For the latest information about
protection, this form may show only the last four digits of your
developments related to Form 3921 and its instructions, such as
social security number (SSN), individual taxpayer identification
legislation enacted after they were published, go to
number (ITIN), or adoption taxpayer identification number (ATIN).
www.irs.gov/Form3921.
However, the employer has reported your complete TIN to the
IRS.
Account number. May show an account or other unique number
your employer or transfer agent assigned to distinguish your
account.
CORRECTED (if checked)
TRANSFEROR’S name, street address, city or town, state or province,
1 Date option granted
OMB No. 1545-2129
Exercise of an
country, and ZIP or foreign postal code
Form 3921
Incentive Stock
Option Under
2 Date option exercised
Section 422(b)
(Rev. October 2017)
TRANSFEROR’S TIN
EMPLOYEE’S TIN
3 Exercise price per share
4 Fair market value per share
on exercise date
Copy C
$
$
For Corporation
EMPLOYEE’S name
5 No. of shares transferred
This copy should
be retained by the
Street address (including apt. no.)
6 If other than TRANSFEROR, name, address, and TIN of
corporation whose
corporation whose stock is being transferred
stock has been
transferred under
City or town, state or province, country, and ZIP or foreign postal code
Section 422(b).
Account number (see instructions)
3921
(keep for your records)
Form
(Rev. October 2017)
www.irs.gov/Form3921
Department of the Treasury - Internal Revenue Service
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When Is Form 3921 Due?

The corporation will comply with their filing requirement as long as this form is properly addressed and mailed on or before the due date. The tax form 3921 due date is February 28, 2020, if filed on paper, or March 31, 2020, if the form is filed electronically. Should the filing due date fall on a weekend day or legal holiday, the form may be filed by the next business day. It is possible to get an automatic 30-day time extension to file by filing Form 8809.

If the corporation does not file a correct information return by the due date and no reasonable cause can be demonstrated, it may be subject to a late filing penalty. The amount of the penalty will be different depending on when the corporation files the 3921 form correctly. The penalty shall be as follows: (a) $50 per information return if they are correctly filed within 30 days (by March 30 if the due date is February 28); (b) $110 per information return if they are correctly filed more than 30 days after the due date but by August 1st; or $270 per information return if they are correctly filed after August 1st.

IRS Form 3921 Instructions

The corporation must file Form 3921 for each transfer made to their transferees, pursuant to the exercise of the option, during the calendar year. The corporation is also required to furnish a statement to the transferee whose name is set forth on the form by January 31st of the following year.

This form is comprised of four copies: Copy A is for filing with the IRS; Copy B is for furnishing the form to the transferee who exercised the ISO; Copy C is for the corporation whose stock was transferred, and Copy D is for the Transferor's records. The IRS provides general and specific instructions for this form.

How to Report IRS Form 3921?

This form may be filed either by mail or online. You must file online if you are required to file 250 or more forms. The basic information required to fill out the form includes the following:

  • Name of the employee who exercised ISOs in the calendar year
  • Employee's Taxpayer Identification Numbers (TINs)
  • Exercise Date of the ISO
  • Exercise Price of the ISO
  • Fair Market Value as of the exercise date
  • Number of shares acquired

If you file the form on paper, you may file it with one of the following IRS Centers, depending on where the corporation is located: Austin, TX; Kansas City, MO; and Ogden, UT. Corporations may order IRS Form 3921 copies online. Corporations are required to print Copy A of the form on special paper, which can be ordered from the IRS. Moreover, all paper submissions must be accompanied by Form 1096 as the transmittal document, and make sure that the filer's name, address, and TIN on Form 1096 coincide with the information on Form 3921. If after filing you discover that there are additional forms that must be filed, file them with a new Form 1096. Note that if you are filing online, you need to have an account in the IRS FIRE system.

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