Your employer likely included the compensation income for your ESPP on your W-2, particularly if you were still employed by the company when you sold your ESPP shares. However, to be certain that is the case, you need to check with your employer. You are correct in that if the ESPP ordinary income element is included on your W-2, it will be added to the wage amount in box 1.
At least some of the information TurboTax needs relates to whether your ESPP sales were qualifying dispositions (sales) or non-qualifying dispositions. What distinguishes a qualifying disposition from a non-qualifying disposition is timing. In a qualifying disposition, you meet the holding period if you don't sell your stock until the end of the later of:
- The 1-year period after the stock was transferred to you, or
- The 2-year period after the option was granted.
If you meet the above holding period, then your ESPP sale is a qualified disposition, and you are eligible to receive favorable tax treatment as it relates to the compensation element of your ESPP.
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