Your work makes Intuit successful, and the Employee Stock Purchase Plan (ESPP) is another way to be rewarded. The ESPP gives you the chance to own a piece of Intuit and save for the future.
The ESPP lets you buy Intuit shares at a minimum 15 percent discount—an instant win! If you hold your shares and Intuit's share price goes up, you win again because you can sell your shares at a higher price.
The ESPP is a great way to sweeten your savings strategy. Consider the ESPP for all of your short- and long-term savings goals:
- Pay off high-interest debt.
- Supplement your retirement savings.
- Save for a down payment on a house.
- Create or contribute to a college savings account.
- Build an emergency savings fund.
You can enroll during one of these two open enrollment periods: Feb. 15–28/29 or Aug. 15–31.
Visit the Morgan Stanley website. Do not log in. From the home page, click “Enroll or adjust contributions.” Then enter:
- INTU as the ticker symbol
- Your Social Security Number or Global ID number
- Your date of hire
You can change your deferral percentage during either enrollment period: Feb. 15–28/29 or Aug. 15–31. You may withdraw and have your accumulated deductions returned to you at any time.
During the enrollment period, you can elect to contribute 2 percent to 15 percent of your total compensation (base salary plus incentive compensation). Once you’ve enrolled, there’s nothing more for you to do. Contributions are made to your ESPP via automatic payroll deductions. Deductions are taken out on an after-tax basis, but they’re calculated based on pretax earnings.
Every year, there are two six-month offering periods. Each of these offering periods is composed of two three-month purchase periods.
- During the Sept. 16–March 15 offering period, the purchase periods are Sept. 16–Dec. 15 and Dec. 16–March 15. The stock purchase dates are Dec. 15 and March 15.
- During the March 16–Sept. 15 offering period, the purchase periods are March 16–June 15 and June 16–Sept. 15. The stock purchase dates are June 15 and Sept. 15.
Your paycheck deductions accumulate over each purchase period. At the close of each purchase period (the “purchase date”), shares of Intuit common stock are purchased at a 15 percent discount from the lower of: (1) the closing price on the purchase date; or (2) the closing price on the first day of the offering period (the “offering date”). Shares will be available in your account three to five business days after the purchase date.
Note: If the purchase date falls on a weekend or U.S. holiday, it moves to the preceding Friday or business day.
* The Internal Revenue Service limits purchases under the ESPP to $25,000 worth of stock for any calendar year, valued as of the first day of the Offering Period. Despite its name, it is not a $25,000 limit on the amount an employee can contribute each calendar year. Rather it’s a limit on the maximum value of shares that an employee may purchase under the ESPP for each calendar year in which he or she participates. This calculation can be complicated because the value given to shares an employee purchases under the ESPP is not the discounted price, but rather the full value of the shares on the first day of the Offering Period. If you reach this limit in a Purchase Period, your share purchase will be limited and your contributions in excess of the limit will be returned to you.
Special ESPP Features
These two key features of the ESPP ensure that you always receive the best possible purchase price:
- Look-back feature: If Intuit’s share price increases during the offering period, you pay 85% of Intuit’s share price on the offering date. In this scenario, the discount from the market price will exceed 15%.
- Reset feature: If Intuit’s share price decreases between the offering date and the beginning of the second purchase period, the reset feature kicks in. You are withdrawn from that offering period and enrolled in a new three-month offering period. In this scenario, the discount is calculated from the lower of: (1) the closing price on the first day of the abbreviated offering period; or (2) the closing price on the purchase date.
Once stock has been bought for you and placed in your Morgan Stanley account, you can sell it at any time within the rules of Intuit's Insider Trading Policy. Trading restrictions do not apply to automatic purchases under the employee stock purchase plan, but employees may not sell ESPP shares during a closed window. There is no small transaction exception. ESPP shares are delivered to your account during our regular open trading window (mid-March, Mid-June, mid-September, and mid-December). Provided you do not have material nonpublic information and are not subject to a special trading blackout, you may sell your ESPP shares before the trading window closes. Even during the open window period, anyone possessing material, non-public information may not engage in any transactions in our stock until that information becomes public. You may sell your shares by logging into your Morgan Stanley account or calling Morgan Stanley at 1-866-669-8842, or 1-801-617-7414 for callers outside the U.S.
The purchase of stock is not a taxable event because you’re purchasing with after-tax dollars. However, the sale of your stock is subject to federal and state (if applicable) income tax rules.
In general, how much you pay in taxes depends on how long you’ve held your shares. In the U.S., the tax consequences arising from the ESPP will depend on:
- Whether or not you meet specific holding-period requirements
- Any stock price changes between the purchase date and the date you sell the shares
How long purchased shares are held will determine the portion of any gain that will be treated as ordinary income, short-term capital gains or long-term capital gains. Gains or losses on the sale of ESPP shares are reportable on your annual tax return. Intuit will not withhold taxes with respect to any sale of ESPP shares. You will be responsible for paying any such taxes that are due. Consult a tax advisor for assistance with your individual situation.