Yes, you do want to enter the 1099-B for the transaction.
You will want to use the reported basis and then adjust it. To report this transaction correctly:
- In the Federal > Income & Expenses > Investment Income section of your return, click Start/Revisit next to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
- Answer Yes and then select stocks. Import or enter your transactions manually.
- For the employer stock transactions, make sure to select Yes to Do these sales include any employee stock?
- Under What type of investment did you sell? Use the pulldown menu to select NQSO.
- Enter the rest of the information as it appears on your 1099-B and hit Continue.
- Under Adjust your cost basis to ensure your best outcome if you have the basis for the shares you sold, click on I found my adjusted cost basis and enter the amount from the supplemental information.
The compensation element and the taxes withheld are correctly reported on your W-2, as you said. If these stocks were sold to cover taxes and you have not sold additional shares, this sale has no tax consequence because the cost of the stock and the sales price will be the same. For more information about the tax treatment of NQSOs, read this article.
