Employee Stock Purchase Programs can be an important benefit to help clients. These programs can help by providing a lower price point to buy the employer stock, which creates an incentive for employees to buy stock of their employer.
The tax impact can vary based on when the shares were sold. If the sale is a qualifying disposition, the tax treatment is handled one way. If the sale is a disqualifying disposition, the tax treatment will be handled another way.
This flowchart addresses the differences between these two aspects and how you can calculate the tax liability for either a qualifying or disqualifying disposition.