How are RSUs (Restricted Stock Units) taxed?

RSUs are taxed as ordinary income at vesting. The taxable amount equals the fair market value of shares on the vesting date multiplied by the number of shares. Your employer typically withholds 22% federal tax (37% over $1M) plus applicable state taxes.

What is the difference between ISO and NSO stock options?

ISOs (Incentive Stock Options) receive preferential tax treatment if holding period requirements are met, with potential for long-term capital gains. NSOs (Non-Qualified Stock Options) are taxed as ordinary income at exercise on the spread between exercise price and fair market value.

What is the California Tail Tax?

The California Tail Tax refers to California's ability to tax equity compensation that was granted while you were a California resident, even after you relocate to another state. California uses a source-based allocation formula: California-sourced income = Total income × (CA service days ÷ Total service days).

Should I make an 83(b) election?

An 83(b) election can be beneficial when you expect significant appreciation in your company's stock. By electing within 30 days of grant, you pay tax on the current value rather than the potentially higher value at vesting. This converts future gains to long-term capital gains if held for 12+ months.

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RSU

Restricted Stock Units

RSU Tax Guide: Vesting, Wages & IRS Publication 525 (Restricted Stock Units)

How RSUs are taxed as wages when shares vest: FMV included in income, IRS Publication 525 alignment, supplemental withholding (often 22%), W-2 reporting, and why 83(b) does not apply to typical RSUs. Double-trigger RSUs and capital gains after vest.

Section 83(b)

Restricted Stock

Section 83(b) Election: 30-Day IRS Rule for Restricted Stock (Treas. Reg. §1.83-2)

Section 83(b) election for restricted stock and early-exercised options: must file within 30 days of transfer, official IRS Form 15620, Treasury Regulation §1.83-2, what Pub. 525 covers, and why 83(b) does not apply to typical RSUs.

IFICI

NHR 2.0

Portugal NHR 2.0 vs Equity: IFICI and Startup Tax Guide

Complete guide to Portugal's IFICI regime (NHR 2.0) for equity compensation. Covers 20% flat rate, Article 43-C 14% startup regime, US-Portugal tax treaty, and eligibility.

83(b)

Expat

Section 83(b) Election for Expats: The $100K Strategic Decision

Expert guide on filing IRS Section 83(b) elections as a non-US person. Includes 30-day deadline mechanics, TIN/ITIN procedures, AMT implications, and why FEIE won't save you.

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Tax Rules by Country

Understand equity taxation in your current or future jurisdiction.

🌍

Australia

Guide to stock options and RSU taxation in Australia. Covers ESS rules, tax-deferred schemes, and the 30-day rule.

🌍

Brazil

Guide to stock options and RSU taxation in Brazil. Covers capital gains treatment, recent court rulings, and planning for employees of Brazilian and foreign companies.

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Canada

Guide to stock options and RSU taxation in Canada. Covers the 50% stock option deduction, CCPC vs. public company rules, and T4 reporting.

🇫🇷

France

Complete guide to stock options and RSU taxation in France. Understand French tax rates, social security, and planning strategies for equity compensation.

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Germany

Guide to stock options and RSU taxation in Germany. Understand income tax, solidarity surcharge, and social security on equity compensation.

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India

Guide to stock options and RSU taxation in India. Covers perquisite tax, capital gains, TDS, and rules for employees of Indian and foreign companies.

View all countries

Frequently Asked Questions

Quick answers to common equity compensation tax questions.

How are RSUs (Restricted Stock Units) taxed?: RSUs are taxed as ordinary income at vesting. The taxable amount equals the fair market value of shares on the vesting date multiplied by the number of shares. Your employer typically withholds 22% federal tax (37% over $1M) plus applicable state taxes.
What is the difference between ISO and NSO stock options?: ISOs (Incentive Stock Options) receive preferential tax treatment if holding period requirements are met, with potential for long-term capital gains. NSOs (Non-Qualified Stock Options) are taxed as ordinary income at exercise on the spread between exercise price and fair market value.
What is the California Tail Tax?: The California Tail Tax refers to California's ability to tax equity compensation that was granted while you were a California resident, even after you relocate to another state. California uses a source-based allocation formula: California-sourced income = Total income × (CA service days ÷ Total service days).
Should I make an 83(b) election?: An 83(b) election can be beneficial when you expect significant appreciation in your company's stock. By electing within 30 days of grant, you pay tax on the current value rather than the potentially higher value at vesting. This converts future gains to long-term capital gains if held for 12+ months.

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