The employer grants the RSU at market rate, no tax at allocation since they are not vested.
Those RSUs vest 1/3rd every subsequent year. The employer taxes the entire vesting amount and includes that in the tax return, Feb of every year. Please note that every year will have RSUs vesting from last 3 years (1/3rd each year from last 3 years).
So in 2023 Feb – I got the below RSUs vested
Feb 2020 – 1/3rd - Allocated in India, for my India work and hence my India employer taxes the component, pro-rated for the number of days I was in India post allocation
Feb 2021 – 1/3rd - Allocated in India, for my India work and hence my India employer taxes the component, pro-rated for the number of days I was in India post allocation
Feb 2022 - 1/3rd - Allocated in India, for my India work and hence my India employer taxes the component, pro-rated for the number of days I was in India post allocation
May 2022 I move to US and become a US tax resident.
Feb 2023 when the above 3 vest, US employer says that we see all of this above 3 years as Income and will include this in your W2, even if it means double taxation. Bunch of explanation around required by US rules .
Question : why are the amounts that you show become equal? What are "other" wage income -- etc. etc.
Answer : Wage Income is deferred pending bonus which was paid by India subsidiary in Feb 2023 for the year 2022 , the amounts are equal incidentally with RSU, no relation to each other.
I am including that deferred bonus in both my India and US tax returns for 2023. I provided my total foreign income information to give you a break-up of the foreign income I have in 2023 and whether that will require me to file Form 8833 or I can claim exemption from From 8833 (Since the Double taxed amount is less than 10,000)
