Startup Workers Would Get Tax Relief on Paper Wealth Under GOP Plan
- Bill is expected to include tax deferral for stock options
- VCs cheer carried interest, R&D and small business policies
Photographer: Victor J. Blue/Bloomberg
Startups lure talent with the potential for future riches, but many workers later find they can’t afford the tax payment associated with acquiring their stock options. U.S. House Republicans are expected to offer a solution in their tax bill, along with other incentives for private companies and venture capitalists.
A version of the legislation in the works will contain a provision for delaying tax obligations on stock options in closely held companies, said Justin Field, vice president of government affairs at the National Venture Capital Association, an industry trade group. Although it wasn’t in the bill published Thursday, House Majority Leader Kevin McCarthy touted the plan in an editorial for the Financial Times, saying it would extend the period before shareholders must pay taxes on unrealized stock gains.