Embodiments of the disclosure provide integrated circuit (IC) structures with stepped epitaxial regions and methods of forming the same. A method according to the disclosure can include: removing a portion of a substrate to form a recess therein, the portion of the substrate being laterally adjacent to a semiconductor fin having a sidewall spacer thereon, to expose an underlying sidewall of the semiconductor fin; forming an epitaxial layer within the recess, such that the epitaxial layer laterally abuts the sidewall of the semiconductor fin below the sidewall spacer; removing a portion of the epitaxial layer to form a stepped epitaxial region adjacent to the semiconductor fin, the stepped epitaxial region including a first region laterally abutting the sidewall of the semiconductor fin, and a second region laterally adjacent to the first region; and forming a gate structure over the stepped epitaxial region and adjacent to the semiconductor fin.