Backdating tax credits

Non-qualified stock options do not meet the criteria to be treated as an incentive stock option, which has a tax benefit of having the options taxed at the lower capital gains tax rate.

In some instances, it can result in underpayment of income at the ordinary income tax rate and overpayment of capital gains taxes, which carry different rates.

For example, say a company board meets on January 30, 2003, when the company’s share price is $25, and decides to grant an employee a $20 stock option with a date of January 1, 2003, when the stock was $20.

But in the last 60 days, you had an increase in household income or moved, making you newly eligible for premium tax credits.

You applied for Medicaid or CHIP during the Marketplace Open Enrollment Period and your state Medicaid or CHIP agency determined that you weren’t eligible for Medicaid or CHIP after Open Enrollment ended.

However, where the child is maintained by more than one person, the tax credit is divided between them in proportion to the amount paid by each towards the maintenance of the child.

You can claim the credit online through Revenue's my Account service.

You then become eligible for a premium tax credit and other savings on a Marketplace plan, if you qualify based on your income.

If you qualify for this SEP, you'll have 60 days to enroll in a Marketplace plan.

In much the same way that backdating is now prompting some companies to restate, corporate tinkering with options can damage the personal equivalent of a financial statement: your tax return.

Backdating — setting the grant date of an option earlier than the actual date it is granted, typically in order to take advantage of a lower stock prices — can create tax implications for the recipient, as well as the company.

You may qualify for a Special Enrollment Period regardless of whether you applied through: You gained a new dependent or became a dependent of someone else due to a court order.

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