And if they still don't cooperate, you may have one more option available. You can file Form SS-8, which is an application with the IRS to have those option payouts to be classified as wages. If the IRS determines in your favor, they will go back to the company and ask for 1/2 of the SS and Medicare that employers are required to pay on behalf of their employees. You would still be required to pay the other 1/2, as well as Federal and State taxes, because these taxes were not withheld at the source.
Because it is paid compensation for services, though, the options are liable to Social Security and Medicare tax. The question is whether you are only liable for half of the tax as an employee or the whole amount as self-employed. Your reasoning sounds solid, but you may need to prove your case with the IRS.
For additional information, please see this website: About Form SS-8 | IRS.gov (Click on link, and you can click on (HTML) on the page to get specific instructions about how the Form is used).
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
