It’s not an existing liability for the company if the taxes were paid during fiscal 2021. The income taxes are paid by the employee and the company only temporarily books a liability until they are paid. The sale of ISO shares are reported in box 14 of the W-2 if they are sold within one year. On a cashless exercise they are sold right away. So in that case there would be no tax liability to report at 12/31/21. If options are not sold the employee is issued a Form 3922 (which they get regardless) for ISOs and must report AMT implications in the event they are not sold in the tax year. That’s my understanding. I am not an attorney or a financial advisor.