It depends! A performance award is a grant of company shares or units in which the recipient's rights in the shares or units are contingent on the achievement of pre-established performance goals, and restricted until the end of a set performance period.
Summary:
- When you receive an RSU award, you don't actually own the stock until it vests. Accordingly, there is nothing to report at the time of the award.
- Once the stock has vested, the fair market value of the stock gets reported as ordinary income, usually in box 1 of your W-2. In some companies, employees can earn dividends from unvested RSUs — these are also reported in box 1 of their W-2 forms.
- After vesting, you own the stock outright. Should you later sell those shares, you'll get a 1099-B which will report the gain or loss from the sale.
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