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IRS Form 3921

Sometimes companies reward their employees by giving them incentive stock options (ISO). If these ISO were exercised during the year, then your company has to file Form 3921.

For each exercise, the company needs to file a separate Form. If the company does not manage to complete everything on time, then very high fines can be imposed, so this obligation should not be neglected. Plus, filling out forms is not that hard; you can use our form-building software to create them.

Who Must File the Form

The form is to be completed by the company that supplied the ISOs during the current financial and accounting year.

However, there are exceptions; for example, filling out a form is not required if:

  • The employee is a citizen of another country;
  • The employee is not provided with a Wage and Tax Statement, Form W-2.

When to File This Form

There are several deadlines for completing this document. The company is obliged to provide a completed form for:

  • Employees — until January 31;
  • IRS — by February 28 if completed on paper;
  • IRS — by March 31st, if completed electronically.

In the event of a violation of the deadline, the company will be subject to fines, and their amounts can reach significant sums of millions of dollars. It is worth taking the deadlines seriously.

Other IRS Forms for Corporations

Companies have to prepare different IRS forms depending on their structure, conducted transactions, and many other factors. The more you learn about IRS forms for businesses, the easier it will be for you to file the required documents with the IRS.


How to Fill out IRS Form 3921

The form consists of four parts: A, B, C, and D. Copies B through D can be completed online in pdf format. The online version of copy A is not scannable, so it is forbidden to print it out from the website. Better to request it from the Revenue Service and they will send printed copies on a special paper. All four copies are the same; the only difference is that:

  • Copy A is used for the IRS;
  • Copy B is given to the employee;
  • Copy C remains with the company;
  • Copy D is used for Transferor.

We will show you how to fill out the form using the example of copy B. Please see our illustrated guide below.

Start Filling out by Entering Company’s Data

Fill in the company’s details, including its business name, complete physical address, and the TIN.

step 1 - start filling out by entering company’s data - filling out irs form 3921

Enter Employee’s Details

You need to enter the employee’s data as well, including their TIN, legal name, physical address, account number.

step 2 - enter employee’s details - filling out irs form 3921

Complete Items 1-4

Fill in all the necessary information regarding the directly exercised ISO.

step 3 - complete items 1-4 - filling out irs form 3921

Fill in Box 6 (If Applicable)

If another corporation whose stock is being transferred appeared in the Transferor’s Box, then complete this step. Submit its business name, complete physical address. and the TIN.

step 4 - fill in box 6 (if applicable) - filling out irs form 3921

The information provided in the document is used by the Revenue Service, among other things, to verify the claim for preferential tax treatment.

Frequently Asked Questions

What If You Are an Employee and Get Form 3921?

You must use this form to estimate the additional income that should be added when calculating the AMT tax liability.

The most important value for you, indicated in the document, is in Box 4. The company puts fair market value per share on the exercise date there, estimated by the company’s 409A valuation. You should already know the rest of the data specified in the form.

You must submit this form to your accountant to determine the date you exercised your options. Even if you have not sold any of the shares yet, this calculation could result in a tax liability. Ensure to save your copy of the form for personal records. You will need it for tax purposes when selling your ISOs.


What If I Have Not Received Form 3921?

You must receive it by January 31st. If within this period the employer has not sent it to you, then urgently contact them. If the deadlines are violated, the IRS imposes heavy fines on the company.

The company transfers the form data not only to you but also to the IRS. Therefore, do not try to hide any part of this form.