Walmart employees and shareholders usually receive two to five tax forms a year connected to their stock, and which Walmart stock tax forms show up in your mailbox depends on how you got the shares. The most common are Form W-2 (for compensation income from vesting or exercises), Form 1099-B (for any sales), and Form 1099-DIV (for dividends). If you hold Incentive Stock Options you may also get Form 3921, and if you participate in the Associate Stock Purchase Plan you’ll get Form 3922. Each one plays a specific role, and a few of them are easy to mishandle in ways that cost real money.
W-2 Income From RSUs and Nonqualified Stock Options
If Walmart grants you Restricted Stock Units, the value of the shares on the day they vest is ordinary wage income. That amount is included in Box 1 of your Form W-2 alongside your salary. Walmart withholds federal income tax, Social Security, and Medicare on the vesting income, typically by selling enough of the newly vested shares to cover it, so the shares that actually land in your account are fewer than the total that vested.
Write down the vesting-day price. That number is your cost basis in the shares you kept, and it’s the single most important figure to hold onto, because when you eventually sell, the only real gain is what the stock appreciated above that price. Ignore it and use whatever basis your broker reports, and you’ll almost certainly overpay. More on that below.
Nonqualified Stock Options work the same way on the W-2. When you exercise NSOs, the spread between your exercise price and the market price that day is ordinary income in Box 1. Your basis in the resulting shares is the market price on the exercise date, not the lower exercise price you paid.
Form 3921 for Incentive Stock Options
Incentive Stock Options behave differently. Exercising an ISO produces no W-2 income, provided you hold the shares long enough to keep favorable treatment. Instead, the company files Form 3921, which reports the exercise price and the fair market value on the exercise date.1Internal Revenue Service. Instructions for Forms 3921 and 3922 You get a copy, and the numbers feed two different calculations.
First, Alternative Minimum Tax. The ISO spread is invisible to regular income tax but counts as an AMT adjustment, reported on line 2i of Form 6251.2Internal Revenue Service. Instructions for Form 6251 The regular-tax exclusion for ISO exercises simply doesn’t apply for AMT purposes.3Office of the Law Revision Counsel. 26 USC 56 – Adjustments in Computing Alternative Minimum Taxable Income The result: a real tax bill can show up on shares you haven’t sold.
Second, the eventual sale. Hold the shares at least two years from the grant date and one year from the exercise date, and the whole gain from exercise price to sale price is a long-term capital gain. Sell before either date, and it’s a disqualifying disposition: the spread converts to ordinary income and lands on your W-2 or Schedule 1.4Internal Revenue Service. Topic No. 427, Stock Options
Form 3922 for the Associate Stock Purchase Plan
Walmart’s Associate Stock Purchase Plan is a qualified employee stock purchase plan under Internal Revenue Code Section 423, which caps the purchase discount at 15% of fair market value.5Office of the Law Revision Counsel. 26 USC 423 – Employee Stock Purchase Plans When shares are transferred to your brokerage account, you get Form 3922. It records the grant date, the purchase date, the price you paid, and the fair market value on each of those dates.6Internal Revenue Service. Form 3922 – Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c)
By itself, Form 3922 reports no taxable income. It’s a data sheet for later. Keep it, because the tax treatment when you sell depends on how long you held.
Qualifying Dispositions
To get the best treatment, hold the shares more than two years after the grant date and more than one year after the purchase date. Only part of your profit is then ordinary income: the lesser of your actual gain or the discount you received. Anything above that is long-term capital gain.
The ordinary income portion should appear on your W-2 in Box 1. If it doesn’t, you’re on the hook to report it on Schedule 1 of Form 1040.7Internal Revenue Service. Stocks (Options, Splits, Traders) 5 Either way, that ordinary income gets added to your purchase price to form your adjusted cost basis for the capital gain calculation.
Disqualifying Dispositions
Sell before hitting either holding period, and the full spread between your discounted purchase price and the fair market value on the purchase date is ordinary income on your W-2. Any further gain or loss from the purchase-date value to the sale price is a capital gain or loss, short- or long-term depending on how long you held.
Form 1099-B When You Sell
Every sale of Walmart stock generates a Form 1099-B from your broker, reporting the sale date, proceeds, acquisition date, and cost basis to you and to the IRS.8Internal Revenue Service. About Form 1099-B, Proceeds from Broker and Barter Exchange Transactions Box 2 marks the sale as short-term or long-term, and Box 1e shows the basis the broker is reporting.9Internal Revenue Service. Instructions for Form 1099-B (2026)
For shares bought on the open market, the basis is usually right. For shares from any employee compensation plan, it’s frequently wrong. This is where the most expensive mistakes happen.
Fix the Cost Basis Before You File
When RSUs vest, the vesting-day value hits your W-2 as wages and becomes your basis. Your broker’s system often doesn’t know that. The 1099-B may report a basis of zero, or only the original grant price. NSOs have the same problem: brokers commonly report the exercise price instead of the higher fair market value at exercise.
Copy the broker’s basis onto your return without adjusting it and you’ll report a capital gain much bigger than you really had, paying tax a second time on income already taxed as wages. The IRS won’t fix this in your favor. You correct it yourself on Form 8949 using an adjustment code and a negative entry in the adjustments column.10Internal Revenue Service. Instructions for Form 8949
A concrete example: your RSUs vest when Walmart is trading at $50, and that $50 per share is in your W-2. You sell later at $65. The broker’s 1099-B might show a basis of $0 and a $65 gain. Your real gain is $15. On Form 8949, you enter the broker’s $0 basis, add code B, and enter the $50 as a negative adjustment. The totals from Form 8949 then flow to Schedule D.11Internal Revenue Service. Instructions for Form 8949
For qualifying ESPP dispositions, use code O instead, so the ordinary income portion is reported through wages and only the remaining gain shows as a long-term capital gain.
Form 1099-DIV for Dividends
Walmart pays quarterly dividends, and your broker reports the year’s total on Form 1099-DIV.12Internal Revenue Service. About Form 1099-DIV, Dividends and Distributions Box 1a is total ordinary dividends; Box 1b is the qualified portion, which is taxed at long-term capital gains rates. Both figures go on the matching lines of Form 1040.13Internal Revenue Service. Form 1099-DIV – Dividends and Distributions
A dividend is qualified if you held the stock more than 60 days during the 121-day window that starts 60 days before the ex-dividend date.14Internal Revenue Service. IRS News Release IR-2004-22 For long-time Walmart shareholders, essentially all dividends qualify. Employees who received shares shortly before a payment may see some taxed as ordinary income.
If total dividends were under $10 with no withholding, the broker may skip issuing a 1099-DIV. The income is still taxable.
Extra Tax You May Owe on Top
Two things can hit on top of ordinary income tax and capital gains rates.
The Net Investment Income Tax adds 3.8% to capital gains and dividends if your modified adjusted gross income exceeds $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately).15Internal Revenue Service. Net Investment Income Tax The tax applies to the lesser of your net investment income or the amount over the threshold.16Office of the Law Revision Counsel. 26 USC 1411 – Imposition of Tax Wages from RSU vesting count toward the threshold even though they aren’t investment income, so a large vesting year can pull otherwise ordinary dividends into the surtax.
Estimated tax payments are the other issue. Walmart withholds on RSU vesting and NSO exercises, but if you sell shares later in the year and take a significant gain, nothing is withheld on the gain itself. If you expect to owe $1,000 or more after withholding and credits, and your withholding won’t cover 90% of current-year tax or 100% of prior-year tax (110% if prior-year AGI exceeded $150,000), you may need to send quarterly payments with Form 1040-ES.17Internal Revenue Service. Large Gains, Lump Sum Distributions, Etc. A practical alternative if you’re still employed: ask payroll to bump your W-2 withholding for the rest of the year.
Records to Keep and For How Long
Keep your W-2s, 1099-Bs, Forms 3921 and 3922, and brokerage confirmations for at least three years after you file the return that reports the sale.18Internal Revenue Service. How Long Should I Keep Records That’s the standard audit window. Underreport income by more than 25% and it stretches to six years.
For shares you still hold, keep the basis records indefinitely. Vesting confirmations for RSUs, exercise records for options, and Form 3922 for ESPP shares are irreplaceable when you eventually sell and your broker’s records turn out to be incomplete. The three-year clock starts when you file the return for the year you sold, not the year you acquired the stock.