Equity Compensation · 21 min read

Apple ESPP: The Six-Month Lookback, the Tax on Each Sale, When to Sell

The Financial Sciences Company Published Sep 26, 2026

The short answer

Apple’s ESPP buys shares twice a year, on the last trading day of July and of January, at no more than 85% of the lower of the offering-date and purchase-date prices. Each purchase lands inside, or within days of the end of, a trading blackout, so a covered employee’s first practical chance to sell is the window that opens about 24 hours after the quarter’s results, typically early February or early August. Each lot qualifies two years after its offering date; a sale before that reports the purchase-date spread as wages, a sale after it reports at most the offering-date discount.

Apple’s Employee Stock Purchase Plan is generous by the standards of large employers, and most guides stop at the discount. What decides the outcome is the calendar: the two purchase dates land inside Apple’s trading blackouts, each lot has its own qualifying date, and the tax on a sale depends on which of those dates has passed. Below is the plan as filed with the SEC, the purchase dates lined up against the blackout calendar, a multi-year illustration of how lots accumulate, the tax on each way of selling at 2026 federal rates, and the California and Texas layer for an employee who moves to Austin. Figures are for education; confirm your own with a CPA. Apple is named only to identify the plan.

How does Apple’s ESPP work?

Apple runs two offering periods a year, each about six months, and buys shares for participants on the last trading day of each at a price no higher than 85% of the lower of the two prices that bracket the period. The plan document, as amended November 6, 2024 and filed as an exhibit to Apple’s Form 10-Q, sets the terms (Apple Inc. Employee Stock Purchase Plan, as amended November 6, 2024, Exhibit 10.1 to the Form 10-Q for the quarter ended December 28, 2024):

Offering periods. The first runs from the first business day of February to the last business day of July; the second from the first business day of August to the last business day of January. The Offering Date, which is also the option’s grant date for tax purposes, is the first business day of the period.
Purchase price. Not less than the lesser of 85% of the fair market value on the Offering Date or 85% of the fair market value on the last trading day of the period. Fair market value is the Nasdaq closing price unless the administrator provides otherwise. The purchase happens on that last trading day.
Contributions. A whole percentage of eligible compensation from 1% to 10%, by payroll deduction only; no separate cash payments. Eligible compensation is cash pay through payroll, including salary, overtime, commissions and amounts you defer into the 401(k). Participants are re-enrolled automatically each period unless they withdraw, which they may do at any time during a period, in whole, for a cash refund.
The $25,000 cap. No participant may accrue the right to buy more than $25,000 of stock a calendar year, valued at the Offering Date price. Holders of 5% or more of Apple are excluded. Any amount left in the account after a purchase rolls forward to the next period.
Leaving. On a termination of service the outstanding option ends, the participant is withdrawn, and the account balance is refunded.

The plan is written to qualify under Internal Revenue Code §423. That section is why the discount is not taxed when the shares are bought, why the 15% and $25,000 figures exist, and why the tax on a sale turns on two dates: two years from the grant of the option and one year from the transfer of the shares (26 U.S.C. §423(a), (b)(6) and (b)(8)). A sale that clears both is a qualifying disposition; any other sale is disqualifying. The generic rules are covered in every ESPP guide, so the rest of this article stays on what is specific to Apple.

When can you actually sell Apple ESPP shares?

For an employee covered by Apple’s scheduled trading restrictions, usually not on the day the shares arrive. Apple’s insider trading policy, filed as Exhibit 19.1 to its Form 10-K, closes trading on December 1, March 1, June 1 and September 1 and reopens it 24 hours after the quarter’s results are public, which the policy says is typically early February, May, August and November (Apple Inc. Insider Trading Policy, updated September 2024, Exhibit 19.1 to the Form 10-K for fiscal 2024, “Restricted Trading Periods and Trading Windows”). The purchases fall on the last trading day of July and of January, so each lands either inside the June 1 or December 1 blackout or within days of its end, depending on the date of that quarter’s results. The purchase itself goes through regardless: the policy lists purchases under the ESPP among the transactions its restrictions do not reach. Selling the shares is an ordinary trade, and for a covered employee it waits for the window that follows the results release.

Sources: Apple ESPP as amended November 6, 2024 (offering periods, purchase date); Apple Insider Trading Policy, Exhibit 19.1 (restricted periods). The qualifying date is two years after the Offering Date under 26 U.S.C. §423(a)(1); the one-year test from purchase is met first in every case. Window months are the policy’s “typically” dates; the exact reopening follows each earnings release. As of September 2026.
Offering	Option granted	Shares bought	Blackout in force around the purchase	First window a covered employee can sell	Lot qualifies	Window around the qualifying date
February to July	First business day of February	Last trading day of July	June 1 until 24 hours after third-quarter results (typically early August)	The August window: opens after third-quarter results, closes August 31	Two years after the February Offering Date	The February window: December 1 blackout until 24 hours after first-quarter results (typically early February), then open to the end of February
August to January	First business day of August	Last trading day of January	December 1 until 24 hours after first-quarter results (typically early February)	The February window: opens after first-quarter results, closes February 28 or 29	Two years after the August Offering Date	The August window: June 1 blackout until 24 hours after third-quarter results (typically early August), then open to August 31

Three things follow. First, a covered employee gets four windows a year, each roughly three to four weeks, and both ESPP purchases arrive at the start of one: the August window for July shares, the February window for January shares. Second, every lot’s qualifying date lands on the same edge, because two years after the first business day of February is again the first business day of February, when the December 1 blackout is either still in force or has just lifted. Either way, the first practical chance to make a qualifying sale is the same February or August window in which a new lot has just been bought, so decisions about old lots and new lots arrive together. Third, a sale under a Rule 10b5-1 trading plan is the exception: the policy exempts trades under a plan pre-approved by Apple’s Corporate Legal team, subject to a cooling-off period that for employees who are not Section 16 insiders runs to the later of 30 calendar days after the plan is executed and 24 hours after the earnings release for the quarter in which it was executed. A plan signed in one window generally cannot trade until the next, but once it is running it can sell on a qualifying date that falls inside a blackout. We cover the mechanics in our article on Rule 10b5-1 plans for employees.

One qualification. The policy applies to all Apple personnel and to household members who live with them or depend on them, but the scheduled restricted periods apply to those Apple’s Corporate Legal team notifies. If you have not been told you are subject to them, the general rule still governs: no trading while aware of material nonpublic information. Designated Individuals, a narrower group, also pre-clear every trade at least two business days ahead.

How does a lot ladder form?

Every offering adds a lot with its own purchase price, its own purchase-date value and its own qualifying date, so after two years a participant holds four lots that are taxed differently even if they are sold on the same day. The illustration below is hypothetical, in round numbers, and the prices are chosen to make the arithmetic visible, not to describe Apple’s stock. The employee earns $170,000 of eligible pay, contributes 10%, and so puts $8,500 into each six-month offering. Dates are Apple’s plan dates for 2026 through 2028.

Hypothetical illustration. Offering and purchase dates from the Apple ESPP (first business day of February and August; last trading day of July and January). Purchase price is 85% of the lower of the two prices. Qualifying date is two years after the Offering Date (26 U.S.C. §423(a)(1)); a sale must be after that date. Illustrative only, as of September 2026.
Lot	Offering Date and price	Purchase date and price	Paid per share	Shares ($8,500)	One year from purchase	Qualifying date (two years from offering)	First window after it
A	Feb 2, 2026 at $100	Jul 31, 2026 at $120	$85	100	Jul 31, 2027	After Feb 2, 2028	February 2028
B	Aug 3, 2026 at $120	Jan 29, 2027 at $100	$85	100	Jan 29, 2028	After Aug 3, 2028	August 2028
C	Feb 1, 2027 at $100	Jul 30, 2027 at $100	$85	100	Jul 30, 2028	After Feb 1, 2029	February 2029
D	Aug 2, 2027 at $100	Jan 31, 2028 at $140	$85	100	Jan 31, 2029	After Aug 2, 2029	August 2029

Two of the lots show the lookback at work. Lot A was bought at 85% of the $100 Offering Date price while the shares were worth $120, a $35 spread on the purchase date. Lot D’s spread is $55. Lot B ran the other way: the price fell from $120 to $100 during the offering, so the purchase price was set from the lower purchase-date price and the spread was $15. Lot C, with a flat price, has the plain 15% discount. The employee holds 400 shares for $34,000 of contributions, and by the end of 2028 the lots are at four different points in their two-year clocks.

At this pay level the $25,000 cap never binds. Under the Treasury regulations the right to buy accrues in the calendar year the option first becomes exercisable, so a year’s cap is shared by the January purchase and the July purchase that settle in it (26 CFR §1.423-2(i)). In 2027 that is Lot B, worth $12,000 at its $120 Offering Date price, plus Lot C at $10,000: $22,000, under the limit. The cap is measured at the Offering Date price rather than what you paid, which has a consequence for higher earners. At an $85 purchase price against a $100 Offering Date price, $25,000 of stock is 250 shares and $21,250 of contributions, so a 10% contributor reaches it at $212,500 of eligible pay when the price is flat. When the price falls during an offering, the same contributions buy more shares, each still counted at the higher Offering Date price, and the cap arrives sooner. Contributions the cap cannot use stay in the account and roll into the next period under the plan’s terms.

The choice for each lot is the same: sell it in the first window, hold it to its qualifying date and sell then, or hold it beyond that as a long-term position. What differs is the tax on each path.

How is each kind of Apple ESPP sale taxed?

A disqualifying sale reports the purchase-date spread as wages, whatever the sale price; a qualifying sale reports as wages the lesser of the Offering Date discount and the actual gain, with the rest as capital gain. IRS Publication 525 sets both rules. On a disqualifying disposition, “your ordinary income is the amount by which the stock’s FMV when you exercised the option exceeded the option price”, and that amount “isn’t limited to your gain from the sale of the stock”. On a qualifying disposition of stock bought at a discount, the wage income is the lesser of the excess of the share’s value at grant over the option price, or the excess of the sale price over what you paid, with any further gain a capital gain and any loss a capital loss with no ordinary income at all (IRS Publication 525 (2025), Employee stock purchase plan: Holding period requirement satisfied; Option granted at a discount; Holding period requirement not satisfied). Either way, basis for the capital-gain calculation is what you paid plus the amount reported as wages.

Applied to Lot A, with the household filing jointly, $300,000 of other taxable income and 2026 federal rates, the four ways of selling look like this. Ordinary income falls in the 24% bracket, which for joint filers runs from $211,400 to $403,550 (Rev. Proc. 2025-32, section 4.01); long-term gains are taxed at 15% because taxable income stays under $613,700 (Rev. Proc. 2025-32, section 4.03), plus the 3.8% net investment income tax, which applies above $250,000 of modified adjusted gross income on a joint return (26 U.S.C. §1411). California is shown for a resident at the 2025 rate schedule, where a joint return with this income is in the 9.3% bracket (FTB 2025 California tax rate schedules) and capital gains are taxed as ordinary income (FTB, capital gains and losses). Texas has no personal income tax (Tex. Const. art. VIII, §24-a).

Hypothetical, Lot A: 100 shares, Offering Date price $100, purchase-date price $120, paid $85. Married filing jointly, $300,000 of other taxable income, 2026 federal rates (Rev. Proc. 2025-32) and the 3.8% net investment income tax (26 U.S.C. §1411); California at the 2025 rate schedule for a resident. Rules from IRS Publication 525 (2025). Illustrative only; confirm your own figures with your tax professional.
Path	Sale price	Wages	Capital gain or loss	Federal tax	California, if resident	Texas
1. Sell in the first window (August 2026); disqualifying	$120	$3,500 ($120 − $85, times 100)	$0	$840	$326	$0
2. Sell in the November 2027 window: over a year from purchase, under two from the Offering Date; disqualifying	$150	$3,500 (the purchase-date spread, unchanged)	$3,000 long-term	$1,404	$605	$0
3. Sell in the February 2028 window; qualifying	$150	$1,500 (the $15 Offering Date discount, times 100)	$5,000 long-term	$1,300	$605	$0
4. Sell in the February 2028 window at a lower price; qualifying	$90	$500 (the lesser of $1,500 and the $500 gain)	$0	$120	$47	$0

Read across paths 2 and 3: on the same $150 sale, the qualifying date moves $2,000 from wages at 24% to long-term gain at 18.8%, and saves $104 of federal tax on this lot. It saves nothing in California, which taxes both at the same rate. Path 4 shows what the lesser-of rule is for. Had the same $90 sale happened before the qualifying date, the wages would still have been $3,500 and the household would have had a $3,000 long-term capital loss to use against other gains: the same $500 of economic gain, reported as $3,500 of wages and a $3,000 loss.

Lot B shows the other side of the lookback. Because its Offering Date price was $120, the Offering Date discount used on a qualifying sale is $18 a share, figured on an option price of $102, or 85% of $120, as Publication 525 requires when the price was not fixed at grant. Its purchase-date spread was only $15. On a qualifying sale at $150 the wages are $1,800 and the long-term gain $4,700; on a disqualifying sale after one year the wages are $1,500 and the gain $5,000, which is $16 less federal tax. The qualifying date matters most for the lots bought after a rise during the offering, which are the lots with the largest spreads, and can add nothing for a lot bought after a fall.

What changes if you move from Cupertino to Austin?

California keeps a claim on the wage portion of every lot you earned there, in proportion to the work done in California between the Offering Date and the purchase, and gives up the capital gain once you are a Texas resident. FTB Publication 1004 states the rule for a nonresident: the ordinary income from an ESPP sale is taxable by California to the extent you performed services in California from the grant date to the exercise date, and the capital gain has its source in your state of residence when you sell. Its Example 10 walks through an employee who did half the work in California, moved to Nevada, and sold: half the wage income is California’s, none of the capital gain (FTB Publication 1004, section F, Employee Stock Purchase Plans, Example 10).

Apple’s Austin campus makes the question a live one. Apple described the site in 2019 as a $1 billion, 3-million-square-foot campus built for 5,000 employees with room to grow to 15,000 (Apple Newsroom, November 20, 2019), and our Austin page covers the household side of a transfer. Suppose the employee in the illustration moved to Austin on November 1, 2026 and became a Texas resident, halfway through Lot B’s offering period. The lots then sort like this:

Hypothetical. Sourcing under FTB Publication 1004, section F, for a nonresident selling as a Texas resident. Texas has no personal income tax (Tex. Const. art. VIII, §24-a). Wage figures are the qualifying and disqualifying amounts for each lot from the illustration. Illustrative only, as of September 2026.
Lot	Offering period	California share of the workdays	Wages California taxes on a disqualifying sale	Wages California taxes on a qualifying sale	Capital gain
A	Feb to Jul 2026, all in Cupertino	100%	$3,500	Up to $1,500	Texas: no state tax
B	Aug 2026 to Jan 2027, move on Nov 1	About half	About $750	Up to about $900	Texas: no state tax
C	Feb to Jul 2027, all in Austin	0%	$0	$0	Texas: no state tax
D	Aug 2027 to Jan 2028, all in Austin	0%	$0	$0	Texas: no state tax

The California-source wages go on a nonresident return, where the rate is set with reference to total income, and Apple’s payroll reports them on the W-2 in the year of sale whether or not you still live in the state. The residency change itself, and the records that support it, are the subject of our article on moving from California to Texas before a liquidity event. Keep a workday count for any offering period that straddles the move; it is the number California will ask for.

Which forms report an Apple ESPP sale?

Three documents, and the third is the one that goes wrong. Form 3922 is filed by the company for the first transfer of legal title of shares bought under a §423 plan at a discount, and it records the grant date, the purchase date, the fair market value on each, the price paid and the number of shares; the employee’s copy is due by January 31 of the following year (IRS Instructions for Forms 3921 and 3922 (Rev. April 2025)). It is the only document that carries the Offering Date price, which is the number the qualifying-sale calculation needs, so keep every one for as long as you hold the lot.

The W-2 carries the wage portion in box 1 in the year you sell, and Publication 525 says the employer or former employer should report it; if it is missing, you report it yourself on Schedule 1 (IRS Publication 525 (2025), Employee stock purchase plan). What the W-2 does not carry is withholding on that amount. The Code says no income tax withholding is required on the income from a disqualifying disposition (26 U.S.C. §421(b)), so a large disqualifying sale is an estimated-tax item, not something payroll will have covered.

The Form 1099-B from the broker is the trap. For compensatory options granted after 2013, the basis reported to you will not include the amount you reported as wages, and the Form 8949 instructions tell you to increase your basis by that amount, entering the broker’s figure in column (e), code B in column (f) and the correction in column (g) (IRS Instructions for Form 8949 (2025), Adjustments to basis; Column (f) code B). For Lot A sold on path 3, the broker reports $85 a share; the correct basis is $100, the $85 paid plus the $15 of wages. Left uncorrected, the $1,500 is taxed twice. The same correction applies to a disqualifying sale, where the basis is the purchase-date value.

What happens to the ESPP when you leave Apple?

The current offering ends for you and the shares you already own are unaffected. Under the plan, a termination of service terminates the outstanding option, withdraws you from the plan and refunds the balance in your account (Apple ESPP, Section 14(a), Deemed Cancellations: Termination of Service). Contributions made since the last purchase come back as cash; no shares are bought for a partial period. The plan defines termination broadly, including a move to a non-employee role, so a change of status can end an offering as surely as a resignation.

Shares from completed purchases keep their tax clocks. The two-year and one-year tests in §423(a) are measured from the grant and the transfer, not from employment, so a lot bought in July 2026 qualifies after February 2028 whether or not you are still at Apple. A disqualifying sale after you leave still produces wages, and Publication 525 says the former employer reports them, so expect a W-2 from Apple in a year you did not work there. Once you have left, Apple’s scheduled windows no longer govern your trades; the prohibition on trading while aware of material nonpublic information does, and your separation paperwork may say more.

When should you sell Apple ESPP shares?

There is no single answer, and this article does not recommend one. There are three frameworks households use, and each is a rule set in advance rather than a decision made in the window.

Sell each lot in its first window. The discount and the lookback are collected as wages and the money is diversified within weeks. The cost is the qualifying-sale treatment, which on Lot A was worth $104 of federal tax on a $6,500 profit; there is no state cost in California and none in Texas.
Hold each lot to its qualifying date, then sell. The lots with the largest spreads gain the most. The cost is eighteen more months in one stock, which can be worth more or less by then, and a return that depends on the price rather than the discount. The lesser-of rule limits the wage income if the price falls.
A ladder. Sell the new lot in the window it arrives and, in the same window, the old lot that has just qualified. After the first two years, every February and August window carries one sale of each kind, and the position stops growing.

Whichever rule a household adopts, the deciding number is how much Apple stock it holds altogether, RSUs included, as a share of its net worth. Apple’s policy prohibits short sales, hedging and derivative transactions in its stock at all times, and names prepaid variable forwards, collars and equity swaps, so the hedges that appear in guides to concentrated stock are not available to a current employee; directors and executive officers also may not pledge shares (Apple Insider Trading Policy, “No Short Sales, Hedging or Trading in Derivatives”). What remains is staged sales in open windows, a trading plan, gifts of appreciated long-term shares, and losses harvested elsewhere. Our article on diversifying concentrated stock sets out each with its costs and eligibility.

How we approach an Apple ESPP

We start with the lot list, because the plan statement shows shares and the tax law sees lots. Each lot gets its Offering Date price from Form 3922, its purchase-date value, its qualifying date and the window that follows, and the California workday share if the household moved. That inventory is what makes a sell rule possible, and it is the first piece of our work on equity compensation and concentrated stock.

Then the rule is tested against the rest of the household: the RSU vests that land in the same windows, the estimated payments a disqualifying sale creates, the capital gains brackets in a low-income year, and the question of how much of the family’s wealth should depend on one employer. Our page for executives and equity compensation describes that coordination, and the tax mechanics run through our tax planning process with the household’s CPA. The tax should inform the timing without setting it, a trade-off we discuss in when tax planning distorts the portfolio.

Questions worth answering before the next window

Am I subject to Apple’s scheduled restricted periods, and when does the next window open for me?
For each lot: what were the Offering Date and purchase-date prices, what did I pay, and when does it qualify?
Which lots would be disqualifying sales this window, and what wages would they add to this year’s return?
Has my 1099-B basis been corrected for every ESPP lot sold in past years?
Is any withholding coming on an ESPP sale, or do I need an estimated payment?
If I moved from California, what share of each lot’s offering period was worked there?
What share of our net worth is Apple stock today, counting RSUs, and what ceiling have we set?
Would a trading plan let a qualifying-date sale happen inside a blackout, and when would it first be able to trade?

What this does not mean

Nothing here is a recommendation to enroll, to sell or to hold Apple shares on any date, and nothing here is a view on Apple’s stock price. The illustration uses round numbers chosen for arithmetic, and the tax results depend on facts we have not seen: filing status, other income, state of residence and the plan statements themselves. Apple’s plan and policy can be amended; the versions cited are the ones on file with the SEC as of September 2026, and your enrollment materials govern. The Financial Sciences Company is not affiliated with, endorsed by or sponsored by Apple Inc.; the name identifies the plan discussed. Confirm your own figures with a CPA or tax counsel.

Frequently asked questions

How does the Apple ESPP lookback work?

Each six-month offering has two reference prices: the Nasdaq close on the Offering Date, the first business day of February or August, and the close on the purchase date, the last trading day of July or January. The plan sets the purchase price at no more than 85% of the lower of the two. If the price rose during the offering, you pay 85% of the earlier, lower price; if it fell, 85% of the later price.

When is an Apple ESPP sale a qualifying disposition?

When the sale is more than two years after the Offering Date and more than one year after the purchase date. For Apple’s six-month offerings the two-year test always comes second, so a lot bought at the end of July qualifies after the first business day of February two years after its offering began, and a January lot after the first business day of August. Both dates sit at the edge of Apple’s scheduled blackouts, which end 24 hours after that quarter’s results.

How is Apple ESPP income taxed?

Nothing is taxed at purchase. On a disqualifying sale, the difference between the purchase-date value and the price you paid is wages, whatever the sale price, and any further change is capital gain or loss. On a qualifying sale, wages are the lesser of the Offering Date discount and your actual gain, and the rest is long-term capital gain. California taxes the wage portion and the gain at the same rates; Texas has no personal income tax.

Can I sell Apple ESPP shares the day they are purchased?

Usually not, if you are subject to Apple’s scheduled restricted periods. The July purchase falls during the blackout that begins June 1 and the January purchase during the one that begins December 1, and each blackout ends 24 hours after that quarter’s results, typically early August and early February. In a year when results come out before the purchase date the window may already be open. Purchases under the ESPP are permitted during a blackout; sales are not.

Does California still tax my Apple ESPP after I move to Austin?

Partly. Under FTB Publication 1004, California taxes the wage portion of a sale to the extent you worked in California between the Offering Date and the purchase date, even if you sell years later as a Texas resident. The capital gain belongs to your state of residence when you sell, and Texas has none. Keep a workday count for any offering period that straddles the move.

What happens to my ESPP contributions if I leave Apple mid-offering?

Under the plan, your option for the current period terminates, you are withdrawn from the plan, and the money in your account is refunded in cash. Shares from earlier purchases are yours, and their two-year and one-year clocks keep running from the original dates. A later disqualifying sale still produces wages, which Apple reports on a W-2.

Sources and further reading

Next steps

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