1. Short title This Act may be cited as the Empowering Employees through Stock Ownership Act . 2. Treatment of qualified equity grants (a) In general Section 83 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (i) Qualified equity grants (1) In general For purposes of this subtitle— (A) Timing of inclusion If qualified stock is transferred to a qualified employee who makes an election with respect to such stock under this subsection, subsection (a) shall be applied by including the amount determined under such subsection with respect to such stock in income of the employee in the taxable year determined under subparagraph (B) in lieu of the taxable year described in subsection (a). (B) Taxable year determined The taxable year determined under this subparagraph is the taxable year of the employee which includes the earliest of— (i) except as provided in subparagraph (C), the first date such qualified stock becomes transferable (including, solely for purposes of this clause, becoming transferable to the employer), (ii) the date the employee first becomes an excluded employee, (iii) except as provided in subparagraph (C), the first date on which any stock of the corporation which issued the qualified stock becomes readily tradable on an established securities market (as determined by the Secretary, but not including any market unless such market is recognized as an established securities market by the Secretary for purposes of a provision of this title other than this subsection), (iv) the date that is 7 years after the first date the rights of the employee in such stock are transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier, or (v) the date on which the employee revokes (at such time and in such manner as the Secretary may provide) the election under this subsection with respect to such stock. (C) Special rule for stock subject to lock-up periods (i) In general In the case of any qualified stock which is subject to a