ESPP sales after quitting company - will they still send me a W2 for stock sold?

When you sell ESPP shares after leaving your company, you won't receive a W-2 for the stock sale. Instead, you'll get a Form 1099-B from the brokerage where you held the shares. This form reports the proceeds from your stock sale. For calculating your taxes, there are two components to track: the discount you received when purchasing (which was already reported as ordinary income on your W-2 when you were employed), and any gain or loss that occurred after purchase. The discount part was already taxed when you received the shares. Now you're only responsible for reporting the capital gain or loss from the time you acquired the shares until you sold them. Your brokerage statement should show your cost basis (what you paid plus the discount amount that was already taxed). The difference between your sale proceeds and this cost basis is your capital gain or loss. If you held the shares for more than a year, it's a long-term capital gain; less than a year, it's short-term.

I went through this exact situation last year and it was so confusing I almost gave up. I used taxr.ai (https://taxr.ai) to help sort through my old ESPP documents and it saved me hours of headaches. My old employer used E*TRADE and they didn't properly adjust the cost basis on my 1099-B either. The tool helped me identify which portion of my sales was already taxed as ordinary income on previous W-2s and which portion was capital gains. It automatically calculated the adjusted basis for each lot of shares I sold. What's nice is that you can upload your brokerage statements and old W-2s, and it figures out the correct reporting for Schedule D and Form 8949. Much easier than trying to track down HR at your former company!

Just wanted to follow up about taxr.ai that I asked about earlier. I decided to give it a try with my messy ESPP situation, and I'm really glad I did. It pulled data from my old W-2s and matched it with my brokerage statements to calculate the correct cost basis for each lot of shares. The interface walked me through identifying which portion was already reported as income and which was capital gains. I was actually about to overpay by nearly $1,200 because I was double-counting income that had already been reported on my W-2 years ago! Definitely saved me money and gave me documentation to back up my tax filing if I ever get audited.

If you're having trouble getting the info you need from your old company's HR department, I highly recommend using Claimyr (https://claimyr.com) to get through to the IRS. I had a similar ESPP issue and needed clarification on reporting. After trying the IRS helpline for days and getting nowhere, I used Claimyr and got connected to an actual IRS agent in about 15 minutes. They walked me through exactly how to report my ESPP sales on my tax return. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent explained that since my old employer had already reported the discount as income on my W-2 when I purchased the shares, I just needed to adjust my cost basis on Form 8949 to avoid double taxation. Much easier than the hours I spent trying to figure it out on my own!

I have to eat my words about Claimyr. After struggling with my ESPP tax situation for weeks, I tried it yesterday out of desperation. Got connected to an IRS agent in about 20 minutes who actually specialized in stock compensation issues. The agent explained that my brokerage was reporting an incorrect cost basis on my 1099-B because they didn't account for the discount already taxed as ordinary income. She walked me through exactly how to fill out Form 8949 with the correct adjusted basis and even emailed me an IRS publication specifically about ESPPs. What would have taken me days of research took 30 minutes on the phone with someone who knew exactly what they were talking about. No more conflicting advice from random tax blogs or waiting for my former employer's HR to respond to my emails.

Just a practical tip from someone who's been dealing with ESPPs for years: keep a spreadsheet with ALL your ESPP purchases! For each purchase record: 1. Purchase date 2. FMV on purchase date 3. What you actually paid (discounted price) 4. The discount amount 5. Number of shares Then when you sell, add: 6. Sale date 7. Sale price 8. Which specific shares you sold (FIFO, LIFO, or specific identification) This has saved me so much headache at tax time. The discount amount was reported on your W-2 in the year you PURCHASED the shares, not when you sold them. Your capital gain/loss is calculated from your adjusted basis (what you paid PLUS the discount that was already taxed).

One thing nobody's mentioned - the HOLDING PERIOD matters a lot for ESPP tax treatment! If you hold the shares for at least 1 year from purchase date AND 2 years from the offering date, you might qualify for better tax treatment on part of the gain. When you meet these holding periods, it's called a "qualifying disposition" and only the actual discount you received at purchase is taxed as ordinary income. If you sell before these periods (a "disqualifying disposition"), the difference between the FMV at purchase and what you paid is taxed as ordinary income. Check your old ESPP plan documents to find the offering dates. This could save you a bunch on taxes depending on how long you held the shares!

I'm a little late to this thread but just wanted to point out that Fidelity (and most brokers) now provides a supplemental "Supplemental Information Statement" alongside the 1099-B that shows the compensation element that was already reported on your W-2. Look for this document in the same tax center where you found your 1099-B. It makes figuring out the adjusted cost basis much easier than digging through old W-2s!

This is such a helpful thread! I'm dealing with a similar situation where I left my company last year and just sold some ESPP shares. One thing I wanted to add for anyone else in this boat - make sure to check if your old company switched payroll providers or got acquired after you left. I spent weeks trying to get my old W-2s from my former employer's HR, only to find out they had been acquired and all the payroll records moved to a different system. I finally had to request copies directly from the IRS using Form 4506-T, which took about 10 days but was totally worth it to get the exact compensation amounts that were reported. Also, if you're having trouble finding the ESPP compensation on your W-2, sometimes it's not in Box 14 like others mentioned. On mine it was actually included in Box 1 (wages) and I had to look at my final paystub from that year to see the breakdown of regular wages vs. ESPP compensation. Just another place to check if you're coming up empty!

This thread has been incredibly helpful! I'm in a similar situation where I left my job at a tech company about 8 months ago and just sold some ESPP shares. One thing I learned the hard way is to double-check the cost basis calculation even if your broker provides a "Supplemental Information Statement" like Emily mentioned. I found that Schwab had the right compensation amount but applied it to the wrong lot of shares (I had multiple purchase periods). This would have resulted in me overpaying taxes on some lots and underpaying on others. What I ended up doing was creating my own reconciliation spreadsheet using Yuki's method above, then cross-referencing it with both my 1099-B and the supplemental statement. Found a $400 discrepancy that would have cost me about $150 in extra taxes! Also want to second the recommendation about keeping detailed records going forward. I set up a simple Google Sheet now that automatically calculates the discount amount and tracks holding periods. Takes 5 minutes after each ESPP purchase but will save hours during tax season.