Tax
How are NQSOs taxed?
Quick Answer
Non-qualified stock options (NQSOs) trigger ordinary W-2 wages at exercise — the bargain element (FMV minus strike price) is taxed immediately and reported in your W-2 box 1, subject to federal, FICA, and state withholding.
Warren Team
Updated April 26, 2026
34
Warren Team
Updated April 26, 2026
34
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The information provided is for educational purposes only and should not be considered as personalized financial advice. Warren is a registered investment advisor. Past performance does not guarantee future results. Please consult with a qualified financial advisor before making investment decisions.
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