Simplify Form 3921 reporting for stock acquired through the exercise of incentive stock options (ISOs). With 1099Online, you get built-in TIN-matching, bulk import, recipient copy delivery, and secure eFiling in one platform.
Form 3921 is an IRS form that companies use to report when they transfer stock to employees after an incentive stock option (ISO) is exercised under Section 422(b).
The company must file the form with the IRS and provide a copy to the employee. It includes key details such as the grant date, exercise date, exercise price, and the stock’s fair market value at exercise.
Employees use this information to calculate gain or loss when they sell the shares and to determine if alternative minimum tax (AMT) applies.
Form 3921 must be filed by the corporation that transfers stock to an employee or other individual after an ISO is exercised by the recipient. If your company issues shares from an ISO exercise, you must file Form 3921 with the IRS and provide a copy to the recipient. Each exercise requires its own form 3921.
In some cases, an exception may apply for nonresident alien employees. If the company was not required to issue a Form W-2 at any point between the option grant (when the employee receives the stock option) and the exercise date (when they use it to buy shares), Form 3921 may not be required. This exception is limited and applies only in specific situations.
Form 3921 captures the details of the ISO exercise and the resulting stock transfer. For each transaction, the corporation must report:
Each ISO exercise requires separate Form 3921.
Form 3921 continues under the current continuous-use IRS instructions with no announced changes for 2026.
The IRS now places general filing rules for Form 3921 under Publication 1099, and fillable recipient copies remain available on the IRS website. There are no OBBBA-related changes that affect Form 3921 reporting for the 2026 tax year.
Filing of Form 3921 is triggered when a corporation transfers stock to an employee through an ISO exercise. The corporation must undertake the following steps to report the stock transfer accurately:
The standard recipient copy deadline for Form 3921 is January 31, but since January 31, 2027, falls on a Sunday, it rolls to February 1, 2027. Similarly, the paper filing deadline moves from February 28 to March 1, 2027, since February 28 falls on a Saturday.
| Filing Type | Due Date |
|---|---|
| Furnish recipient copies | February 1, 2027 |
| Paper file with IRS | March 1, 2027 |
| eFile with IRS | March 31, 2027 |
If a filing or furnishing due date falls on a Saturday, Sunday, or legal holiday, the deadline is moved to the next business day.
1099Online provides corporations with a guided way to eFile Form 3921 online. Enter your data manually or import it using the Excel bulk import option, complete your forms, and submit them securely to the IRS.
Step 1: Enter Employee and Stock Transfer Details
Enter the required Form 3921 information manually, or import your data using your
preferred method. Add recipient information, grant and exercise dates, exercise price per share,
fair market value on the exercise date, and the number of shares transferred.
Step 2: Choose Recipient Copy Delivery
Opt in to let 1099Online distribute recipient
copies by postal mail or make them available as a PDF download.
Step 3: Review and Transmit
Review your filing summary and submit your forms securely to the IRS.
No, Form 3921 does not use a flat dollar threshold. Filing is triggered by the transfer of stock following an ISO exercise under Section 422(b), regardless of the dollar value involved.
No. Exercising an incentive stock option (ISO) does not trigger regular income tax at the time of exercise. However, the difference between the exercise price and the stock’s fair market value (the “spread”) may be included in alternative minimum tax (AMT) calculations if the shares are held through the end of the year.
The most common errors involve incorrect dates or amounts: the wrong grant date, exercise date, exercise price per share, fair market value per share on the exercise date, or number of shares transferred. Employees use these exact figures for their own tax calculations, so errors affect more than just IRS compliance. You must cross-check against your stock plan records before submitting.
For returns due in 2027, IRS penalties are $60 per return filed within 30 days of the deadline, $130 per return if filed by August 1, $340 per return if filed after August 1 or not filed at all, and $680 per return for intentional disregard. There is no maximum penalty cap for intentional disregard.
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