KrisD15
Expert Alumni

Get your taxes done using TurboTax

"Sell to Cover" does not eliminate tax, it generates tax-free income to use as a tax payment for all the stock you earned. 

 

When RSU stock vests, it's taxable income. 

All the RSU that vested in 2024 will be included in Box 1 and Box 5 on your W-2.

 

If you also had Sell to Cover, some of the stock was sold to generate revenue to help cover the tax on the vested stock. 

The stock that was sold is still compensation even if you only held it one day. 

 

The revenue of the sale of that stock would have been withheld by your employer and sent as federal tax withholding or if it was done by a Brokerage, the tax paid on the shares sold would be listed on your 1099-B. 

If done by a Brokerage and the sale proceeds were not the same as the day they vested, you may need to adjust, but usually they are the same. 

 

Since the value when vested and the value when sold are the same, there is no capital gain for the shares that are immediately sold. 

This means that the revenue for these shares are tax-free and used to cover the taxes you incur for the shares you kept since they increased your income. 

 

HERE is a link with more information 

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