FICA Tax Withholding for Retirement-Eligible Awards

When an employee has the ability to retire and retain unvested equity compensation that would have otherwise forfeited, there are many accounting considerations. In addition to the more mainstream understanding that expense should be amortized over this shorter period, there is also a FICA tax remittance responsibility when retirement-eligibility is reached. In this issue brief, we discuss when FICA taxes are due, how to calculate the appropriate withholding, and what the implications are to award administration and accounting.