NQSOs are not taxed when they are granted. An NQSO grant means your company gives you the right (or option) to buy a set number of stock shares at a set price for a period of time. When your NQSOs vest, there is once again no taxable event. A taxable event occurs when you exercise your NQSO. Only once you exercise your options do you become an actual company stock shareholder. At exercise, you’ll incur taxes at ordinary income tax rates on the value of the transaction.
