Tax reporting for stock plan transactions can be complex. Morgan Stanley is here to help, providing the communications, resources, and documentation you may need to navigate tax season.
Tax Resources Center
Tax Resources Center on StockPlan Connect provides handy guide and additional information, including:
- The documents needed to file returns
- An explanation of cost basis calculations
- Steps for reporting a stock plan transaction
- Contact information for questions
- A glossary of terms you should know
- And more
The Morgan Stanley Tax Reporting Service Center can be reached at: 1-877-772-1099 or 1-801-617-7467
2018 Tax Forms
Morgan Stanley will mail applicable tax forms by February 15, 2019. Morgan Stanley will also post these tax forms to the Documents section within your StockPlan Connect account; from there, you can select “All Types” or “Tax Documents.”
Domestic participants will receive separate 1099-Bs for the following transactions:
- Stock Option Exercises, Stock-Settled Stock Appreciation Rights (SSAR) Exercises, or Restricted Stock Release Transactions resulting in a sale of stock
- If your company is enabled for 1099 Relief, Stock Option Cashless and Sell-to-Cover (STC) Exercises are not subject to 1099-B reporting
- A Year-End Option Activity Summary will be sent under separate cover
- Sale of Employee Stock Purchase Plan (ESPP) shares
- Sale of Vested Restricted shares
- Sale Transactions for undocumented international participants will also be reported on Form 1099-B.
Note: If your company was migrated onto the new StockPlan Connect website you may receive an additional 1099-B Form based on any activity within your account post-migration.
- Domestic participants will receive separate 1099-Div Forms as follows:
- Dividends paid ($10 or greater) on ESPP long shares
- Dividends paid ($10 or greater) on Vested Restricted Stock long shares
Note: This does not apply to anyone who has migrated to the new StockPlan Connect Platform. Rather, any amount $.01> will be reported.
- Morgan Stanley will send all undocumented participants (both U.S. and non-U.S. participants) a 1099-Div reflecting any amount paid ($.01>)
- If a participant sold ESPP shares or vested restricted stock, the 1099-Div will be included in the 1099-B mailing.
Note: If your company was migrated onto the new StockPlan Connect website you may receive an additional 1099-Div Form based on any dividends earned after the migration.
- Form 1042-S is issued to documented international participants for U.S. sourced income (e.g. dividend)
Cost Basis Reporting
You can find an explanation for how to calculate cost basis on p.4 of the “Tax Filing Basics for Stock Plan Transactions” guide.
Morgan Stanley will provide the Vesting Fair Market Value (FMV) for Restricted Stock Release non-covered STC/SAS transactions as the cost basis on the 1099-B, though we will not report this figure to the Internal Revenue Service (IRS). If covered (award price > $0.00), the award price will be reported as the cost basis.
Important Updates and Reminders
The current tax rate for social security (employee portion) is 6.2%. Effective January 1, 2019, the FICA wage base limit is $132,900.
The Medicare rate (employee portion) remains at 1.45%. The Medicare surtax is 0.9% of an individual’s wages paid in excess of $200,000, without regard to filing status. Morgan Stanley will continue to withhold the Medicare surtax on Stock Option Taxable Transactions in which the participant’s wages are in excess of $200,000. The actual Medicare surtax obligation will be determined during your tax filing.
Morgan Stanley Tax Reporting Service Center at 1-877-772-1099 or 1-801-617-7467
Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors or Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for legal matters.
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CRC 2441768 02/19