How do I get the tax withhold in eTrade for ESPP and RSU?

"How do I get the tax withhold in eTrade for ESPP and RSU?"

The most likely answer, statistically, is "You don't.  Those taxes have already been reported on your W-2 and you can't report them again."

The cash raised by the sale of stock "for taxes" is in almost every case passed back to the employer, who pays the taxes, and scatters those taxes among all the "tax" boxes of your W-2.  

IF you are one of the fairly rare individuals subject to "backup withholding" THEN the broker must report those taxes on the 1099-B.  If you don't see those boxes filled in on the 1099-B then the employer got the cash and paid the tax.

Many people are completely certain that they must report the taxes (again) because they feel that otherwise they have double reported their income.  If you're in that boat then you probably have double reported your income because you are using the wrong basis to report the sale.  That's because the broker only reports your out of pocket cost of acquiring the stock, not the correct basis which is the sum of your out of pocket cost and the compensation element of the stocks you've SOLD. 

IF you know the correct basis to use for the sales - brokers seem to be including that information routinely with supplemental information that's mailed with the 1099-B THEN you can simply enter the 1099-B as it reads and correct the basis.  You do that by clicking the blue "I'll enter additional info on my own" button and on the next page entering the correct basis in the "Corrected cost basis" box.  The correct basis is: (# of shares sold) x (per share basis for that lot.)

If you're unsure of your basis you can use the RSU step-by-step and ESPP step-by-step interviews and, correctly done, they will determine the correct basis to use.  Be aware though that many people are confused by those interviews.

Tom Young

To properly report transactions related to Employee Stock Purchase Plan (ESPP) shares, you will need to manually enter them. 

The ordinary income portion of your transaction is reported on your W-2.  You will have to enter the 1099-B to account for any capital gain or loss as well as adjust to cost basis to reflect the amount reported on your W-2.  To enter your 1099-B, go to:

• Federal Taxes
• Wages & Income
• Investment Income
• Stocks, Mutual Funds, Bonds, Other
• Answer Yes you received a 1099-B
• Do not enter your broker-dealer name and download your 1099-B, instead,
• Click on "I'll type it in myself"
• Enter your Broker and click Continue
• Indicate the type of trades you have on your 1099-B (A, B, D, E, X)
• Enter the details of your transactions as reported on your 1099-B THEN
• Check the Box for "This sale involves an employee stock plan (including ESPP) or an uncommon situation".  Additional information will appear.  Click on Start Now
• Indicate "I have sales from an Employee Stock Plan, including ESPP, NQSO, ISO, RS, and RSU"
• Follow the instructions for the type of employee stock plan you have.  Additional information on these plans is available by clicking the blue Learn More link