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131 STAT. 2163 PUBLIC LAW 115–97—DEC. 22, 2017 ‘‘(6) NOTICE REQUIREMENT.—Any corporation which trans- fers qualified stock to a qualified employee shall, at the time that (or a reasonable period before) an amount attributable to such stock would (but for this subsection) first be includible in the gross income of such employee— ‘‘(A) certify to such employee that such stock is quali- fied stock, and ‘‘(B) notify such employee— ‘‘(i) that the employee may be eligible to elect to defer income on such stock under this subsection, and ‘‘(ii) that, if the employee makes such an election— ‘‘(I) the amount of income recognized at the end of the deferral period will be based on the value of the stock at the time at which the rights of the employee in such stock first become transfer- able or not subject to substantial risk of forfeiture, notwithstanding whether the value of the stock has declined during the deferral period, ‘‘(II) the amount of such income recognized at the end of the deferral period will be subject to withholding under section 3401(i) at the rate determined under section 3402(t), and ‘‘(III) the responsibilities of the employee (as determined by the Secretary under paragraph (3)(A)(ii)) with respect to such withholding. ‘‘(7) RESTRICTED STOCK UNITS.—This section (other than this subsection), including any election under subsection (b), shall not apply to restricted stock units.’’. (b) WITHHOLDING.— (1) TIME OF WITHHOLDING.—Section 3401 is amended by adding at the end the following new subsection: ‘‘(i) QUALIFIED STOCK FOR WHICH AN ELECTION IS IN EFFECT UNDER SECTION 83(I).—For purposes of subsection (a), qualified stock (as defined in section 83(i)) with respect to which an election is made under section 83(i) shall be treated as wages— ‘‘(1) received on the earliest date described in section 83(i)(1)(B), and ‘‘(2) in an amount equal to the amount included in income under section 83 for the taxable year which includes such date.’’. (2) AMOUNT OF WITHHOLDING.—Section 3402 is amended by adding at the end the following new subsection: ‘‘(t) RATE OF WITHHOLDING FOR CERTAIN STOCK.—In the case of any qualified stock (as defined in section 83(i)(2)) with respect to which an election is made under section 83(i)— ‘‘(1) the rate of tax under subsection (a) shall not be less than the maximum rate of tax in effect under section 1, and ‘‘(2) such stock shall be treated for purposes of section 3501(b) in the same manner as a non-cash fringe benefit.’’. (c) COORDINATION WITH OTHER DEFERRED COMPENSATION RULES.— (1) ELECTION TO APPLY DEFERRAL TO STATUTORY OPTIONS.— (A) INCENTIVE STOCK OPTIONS.—Section 422(b) is amended by adding at the end the following: ‘‘Such term shall not include any option if an election is made under 26 USC 3401. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00111 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS