- Meta counted Mark Zuckerberg's $4.1B stock payout as research pay to claim a $355M tax break.
- IRS wants the $355M tax break back.
- Meta's filings show the research credit cut its taxes by $3.9 billion in 2025, up from $2 billion in 2024 and $700 million in 2023.
Meta's classification of Mark Zuckerberg's $4.1 billion stock payout as research wages has led to a contentious battle with the IRS over a claimed $355 million tax break. This situation arose when Zuckerberg exercised stock options in 2012 and 2013, allowing Meta to assert that a significant portion of his payout qualified as wages for research.1
The IRS disallowed these credits, which were based on the premise that employee stock option income can count as wages for the research credit, a ruling supported by past cases involving companies like Sun Microsystems and Apple. The IRS's filing indicates that Facebook claimed over $618 million in research credits for the years in question, with approximately $355 million attributed to Zuckerberg's options, which were granted in November 2005 and later expanded to 120 million shares due to stock splits.
Despite the IRS's disallowance, Meta continues to apply similar tax breaks to its current projects, which it categorizes as experimental
“The research credit cut Meta's taxes by $3.9 billion in 2025, up from $2 billion in 2024 and $700 million in 2023. The IRS's challenge could set a precedent for how tech giants classify executive compensation as research expenses.”
Yahoo Finance
