IRS Issues New Option Reporting Requirement

November 25, 2002 ( - Stock option income must be reported separately on W-2's issued in 2003 and beyond, according to the Internal Revenue Service (IRS).

2003 W-2’s will ask that income from the exercise of nonstatutory stock options be reported in Box 12 of the form and identified by new Code V, the IRS said in announcement 2002-108.   W-2’s for 2003 will be issued shortly and consistent with the new announcement.  

The IRS tried to have income from stock option exercises reported on tax returns in 2001.   But after employers expressed concerns, the IRS postponed the new rule and made reporting optional in 2001 and 2002.  

Announcement 2002-108 will be published in Internal Revenue Bulletin 2002-49, on December 9 th .   A copy of the announcement can be downloaded at .