RSU Taxation explained NYC - George Dimov CPA (2024)

Thank you so much. I’m using TurboTax and could not figure out why importing my 1099s from Fidelity caused my return to plummet. Thanks to this document, I discovered that the Cost Basis was 0, and needed to be updated based on the figure in box 12 (code V). This just added about $2,000 back to my return. Thank you so much.

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Really great information, thanks for the share and insights! I will recommend this to my friends for sure.

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Thanks so much. I just got the letter yesterday with huge tax bill and bumped into this article today…Hope my tax bill not be as high as stated in the cp2000 but just based on the capital gain.

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I am from the UK. I work in the US on a work permit. I have received some R S U’s, The grant date was 01/06/2015, the vest date was 01/06/2019.
I have had wax withheld from the R.S.U’s for both HMRC and IRS. I have not taken the money yet. I am confused as to why UK tax gets involved at all as the shares are basically income from employment and surely should be taxed under US tax law! If I choose not to take the money now and leave it for a while then I appreciate that would be a capital gain and taxed under UK tax law.

I would appreciate your thoughts.

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You are very knowledgeable RSU’s and tax implications. My husband’s employer add RSU’s to his taxable income and it produced a big tax bill. Our tax preparer with H&R Block didn’t know anything about them to educate us.

We need a CPA in the Denver CO area that could help us with this for our 2019 filing. Can you recommend someone in the area?

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Great information – thank you George. Does the one-year clock that determines whether a capital gain is treated as short-term or long term start on the a) Date of Grant, b) Vesting Commencement Date or c) actual Vesting Date (i.e., one-year anniversary, two-year anniversary, etc.)?

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Great info,
My RSU’s which vested and I sold does not show the cost basis on the 1099-B form but shows in the supplemental info of the tax document. I used this to adjust the cost basis. My W2 does not have any info in box 12 or 14. Will this create any issues with the IRS when filing? Shares were sold at the time of vesting to cover the taxes. I’m using TurboTax.

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Thank you for the great information. One thing is still not clear to me. For example, in my case, the vested company RSUs are 130 shares. The company deposited 85 shares to my broker account and used the rest 45 shares as tax withholding. I saw the entire 130 shares’ fair market value has been added into my W2 total income, just like you mentioned above, but the tax withholding, i.e., the 45 shares’ value, was not shown in W2’s tax withhold. That is to say, that withholding amount (45 shares) was not added into the total withholding in W2. How do I include this withholding into my tax return filing? By the way, there are no any info in box 12 or 14 related to this either.

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Hello,

I made a mistake last year where I entered 0 as the cost basis for my RSUs. I have since corrected. However, now looking back multiple years, I see that in 2016 I have RSUs that vested, that I did not sell until 2018. However looking back through my tax documents from the broker I still have a 1099-B for 2016. Do I need to report the vest if I did not sell the stocks? The reason for the confusion is there are no capital gains/losses to report since I did not sell… however I still received a 1099-B. These stocks were then sold in 2018

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Hi George,
Thanks for the great info and clear explanation. One related question — my 1099B lists the sales to pay taxes and the sales where I received money. As I enter these transactions into Turbotax, even the sales made solely to pay taxes cause my tax due number to increase. Can you explain how that is possible? If I sold RSUs and used 100% of the proceeds to pay taxes, how can reporting that fact cause me to owe more tax?
Thanks!

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Hi George,
My husband received RSUs from his employer that vested in June and we sold in June. However, the company they deal with is a wholly Hong Kong-based company and they do not send a 1099-B. They don’t send 1099-B for stock sold that we buy through payroll deduction either. I have researched and on TurboTax it says to select RSU’s when entering the info, but when I select Stocks sold, the next screen asks how they were acquired and there is nothing to select RSU (it shows Gift, Inheritance, Bought, etc). I’m so confused how to figure this all out! Thanks for any help you can give. 🙂

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My husband receives RSU as part of his yearly compensation package. We received the 1099-B form and almost all is being considered short term gain. The company is using the exercise date as the acquired date (not the grant date and not the vesting date). Is this correct?

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Hi,

I have been issued RSU 1500 shares on 19-Jan-17 with vest date on 19-Jan-20. At the time of grant I was working for the company in India. But I have been transferred in same company on 16-Jan-2020 to USA.

My question is weather I will be taxed in India or USA?
My company is saying i will be taxed in India but I debating with them saying it will taxed in USA.

Also on price of share on vest date was $40 but it dropped to $12 on 19th march which can just cover up the taxes. what I suppose to do?
Can I asked to revoke grant now?

Please advise what should I do?

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Hi George !

If you are a part-year NYC resident who had RSU’s granted while you were a NYC resident, do you owe NYC tax on them if they vest while you are living in another state? I know you owe NY state tax but I can’t find anything stating whether you owe NYC taxes as a non-resident.

Thanks !

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HI,

I got some RSU’s granted in USA which vests in 4 years, I was in US for 3 years, 0.8 years in Canada and 0.2 years in India. The last vest happened at 4 year time when is was an employee in India. Do i need to pay Canadian taxes also ? these RSU’s were neither granted nor vested in CANADA.

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Hi,
My RSU was vested and sold 02-22 and 02-23 respectively. My paystub says $8,000 and taxed, my 1099-B says proceed was $3,000 and cost basis of 0. Will my cost basis in schedule D be $8,000?, $5,000? $11,000? If not, what is?
Thanks,

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Greetings, wanted to ask what happens if you are receive a 1099 MISC for RSU’s granted in a particular year. In this case, would there be tax withholdings required to be withheld by the company?

Thanks so much.

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I did not report my RSU income, have just received a 1099-B + transactions supplement; I also did not report 1099-INT income (nominal). Wise to submit an amended return now? Or better to wait on the CP2000 notice?

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Hi, I need help filling my taxes, could you send me an email to know what the cost is for getting assistance on this? I have a regular salary and I also got some RSUs last year which I haven’t sold. I also did some Stock and Crypto buy/sell last year through a few brokerage services.

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Hello, I have a question similar to Aaron above (from Feb 15, 2020). Let’s say you had 130 RSUs, and 45 of them were sold to cover the tax amount at the time of vesting. So, you received only 130-45 = 85 shares. When you sell those 85 shares, what is the cost basis? Is it the FMV (on grant date) of 85 shares, or is it the FMV (on grant date) of all 130 shares?

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Very useful. Succinct explanation of taxation on RSUs. I have a follow up for clarity. I moved back to India in 2019. For the FY 2020, I had RSUs vested and a portion of shares were sold to cover taxes. In my W2 form I see only the RSU income (Box 14) and a small portion of it as tax withheld. To avoid double taxation how would I report the tax already paid using the shares sold? If I enter the information from W2 and also upload 1099 forms, I see a hefty amount as tax I owe.

I have not sold any shares vested. Portion of shares were sold to cover taxes and I was living in Washington state. Your guidance would be appreciated, George.

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My pay statement says “RSU Tax” and then shows it as Income. There is a separate line on the pay statement showing the Income from the vesting of RSUs. I also get SARs. Do you know why I have Income that is called “RSU Tax”?

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Hello, thanks for this blog. I received my RSU grant in New York but moved out to CA 6 months later. Does NY use Allocation Ratio, similar to CA, to calculate it’s share of state tax on RSU’s vesting after I’ve moved out? Thanks.

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Hello – I received 430 RSU in July 2021 while residing in NY State. I moved to FL in July 2022. The vesting schedule calls for 50% vesting in July 2023 and July 2025. I just received the first 50% in July 2023 and NY taxes were withheld. What is my tax obligation to NY State given that I am receiving the vested RSU as a non-resident? Thank you so much.

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