It’s not an existing liability for the company i

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.

My comments are only my opinion and are not to be used for investment advice. Please conduct your own due diligence before choosing to buy or sell any investment.