Qnity spin-off planning for DuPont shareholders and employees

The Qnity separation created more than a second ticker. It created new tax-basis records, a second company-stock position for many DuPont shareholders, and different equity- and retirement-plan questions for employees.

DuPont completed the distribution on November 1, 2025. Holders of record at the close of business on October 22, 2025 received one share of Qnity common stock for every two shares of DuPont common stock. Fractional Qnity shares were aggregated and sold, with eligible holders receiving cash instead. Qnity began regular-way trading on the New York Stock Exchange under ticker Q on November 3, 2025.

Qnity’s 2025 Form 10-K identifies its headquarters as 974 Centre Road, Building 735, Wilmington, Delaware.

Preserve the tax-basis record before trading

DuPont published IRS Form 8937 describing one method of allocating a shareholder’s pre-separation DuPont basis between the retained DuPont shares and the Qnity shares received.

Using the average high and low prices on November 3, 2025, the form illustrates an allocation of approximately:

• 41.11% of the original aggregate basis to the retained DuPont common stock; and
• 58.89% to the Qnity common stock received, including a fractional share for which cash was paid.

The form expressly says other fair-market-value approaches may be possible and that shareholders should consult their tax advisers. It also says shareholders who acquired different blocks of DuPont shares at different times or prices should allocate basis among those blocks carefully.

Before selling either security, preserve:

• DuPont purchase dates, quantities, and original basis by lot;
• the Qnity shares allocated to each DuPont lot;
• the basis and proceeds for cash paid in lieu of a fractional Qnity share;
• the broker’s post-separation basis adjustment;
• DuPont’s Form 8937; and
• any tax preparer’s reconciliation when brokerage records differ.

The Form 8937 example also treats the Qnity holding period as beginning with the related DuPont lot. Individual reporting still depends on the shareholder’s records and tax circumstances.

Treat DD and Q as two separate investment decisions

Receiving Qnity shares did not create a reason to sell automatically, and holding them by default is not a plan either. After the distribution, DuPont and Qnity are independent public companies with different businesses, risks, capital-allocation policies, and return drivers.

A concentration review can ask:

• What percentage of the household’s liquid net worth is now in DD and Q combined?
• Does employment, compensation, or a pension already depend on either company?
• Which lots have gains or losses after the basis allocation?
• Would a sale change the household’s estimated tax payments or charitable giving plan?
• Are there blackout periods, award restrictions, or company policies that limit an employee’s transactions?
• What target allocation and diversification schedule, if any, fit the household’s written investment plan?

The answer may differ for a retired DuPont shareholder, a current Qnity employee, and an executive with unvested awards.

Do not assume every employee equity award converted the same way

Qnity’s 2025 Form 10-K says outstanding DuPont-denominated equity awards at the separation were converted using a ratio determined under the Employee Matters Agreement and retained the terms and conditions of their applicable plans and award agreements.

The public separation materials describe different treatment depending on the award and the holder. For example, the information statement said that, other than specified performance awards, awards for non-executive Qnity employees would generally convert into Qnity awards, while awards for certain executives could be divided between DuPont and Qnity. Qnity’s 2026 proxy describes a hybrid shareholder/employer adjustment methodology for named executive awards.

An employee should therefore identify each award separately:

• award type: option, RSU, PSU, or another arrangement;
• employer and plan after the separation;
• pre- and post-separation quantity;
• exercise price if applicable;
• original grant date and vesting schedule;
• tax-withholding method;
• performance-period treatment for PSUs; and
• treatment at retirement, termination, disability, or death.

The original award agreement and the post-conversion statement are stronger evidence than a generalized spin-off summary.

Coordinate the Qnity retirement plan with company equity

Qnity’s 2025 Form 10-K describes a U.S. Retirement Savings Plan covering regular full-time U.S. employees. The filing says Qnity currently matches 100% of the first 6% of an employee’s contribution election and contributes an additional 3% of eligible compensation regardless of the employee’s contribution. It says matching contributions vest immediately and the 3% nonmatching contribution vests after three years of service.

Those terms are time-sensitive and the current Summary Plan Description controls. Before changing payroll contributions, an employee should confirm eligibility, compensation definitions, contribution limits, vesting service, investment options, and beneficiary designations with the plan administrator.

Company stock outside the retirement plan should be reviewed together with converted and newly granted Qnity awards. A diversified 401(k) allocation does not eliminate concentration if a large part of future compensation and taxable assets still depends on Qnity stock.

A practical post-separation review

1. Reconcile DD and Q share quantities and tax basis by lot.
2. Reconcile any cash-in-lieu payment for a fractional Q share.
3. Inventory converted equity awards using post-separation account statements.
4. Compare the conversion with each award agreement and employer communication.
5. Confirm the current Qnity retirement-plan contribution and vesting terms.
6. Measure total DD and Q exposure across taxable accounts, retirement accounts, awards, and household members.
7. Identify blackout periods and company trading-policy restrictions.
8. Model diversification choices with taxes, cash needs, charitable giving, and the household investment policy.
9. Retain DuPont’s Form 8937 and the relevant plan and award records with tax files.