Entering RSUs on Turbotax

You need to know how many RSUs vested and how many were withheld for taxes in order to determine your basis.

You should be able to find the grant information on your 1099-B form or your consolidated statement. If you can’t find this info, contact your brokerage or your employer's stock plan administrator.

To report RSU sales in TurboTax:

When you enter you 1099-B information you will be asked: 'Do these sales include any employee stock? This includes ESPP, RSU, RS, NQSO, and ISO' Say yes.

Then you will be asked 'What type of investment did you sell?' Select 'Restricted stock units'

Check the box that says 'The cost basis is incorrect or missing on my 1099-B'

Then select 'I need help figuring out my cost basis'

Thanks Robert! Is the information on number of RSUs vesting and withheld for taxes used to calculate the cost basis? Following is the difficulty I am having. Let's say I had lots called A and B vest on March 1 2019 (let's say A was granted in 2017 and B was granted in 2018), and I sold "a" RSUs on September 1 2019. In my trade confirmation or consolidated statement from my brokerage, I only see sale of "a" RSUs without any mention of which lots they belonged to (A or B). So, I am not sure which lot am I supposed to use to determine RSUs vested and withheld for taxes. Can I use either, since the "acquisition" date would anyway be March 1, 2019 and the cost basis per share would be based on the stock price that day?

Yes, all of the shares you received as RSUs are used to calculate the cost basis.

The RSUs do not belong to you until the vest. So your vested date is March 1, 2019 for both lots it does not matter if they were sold from lot A or Lot B.

Yes, the cost basis is the Fair Market Value on the date the RSUs vest.

When your shares vest your employer calculates an amount of compensation for those shares, and reports that in Box 1 of the W-2, so you're going to pay taxes on that compensation.

You need to report the sale of the shares and put in the cost basis so you are not taxed on the sale of the shares twice.

@shanku98 

You say: When you enter you 1099-B information you will be asked: 'Do these sales include any employee stock? This includes ESPP, RSU, RS, NQSO, and ISO' Say yes.

However, I'm not getting this question. Is there a resource that walks me through to show me how I get this question to come up?

Start by entering the details from your Form 1099-B that reports the sale of the stock.  Then, one of the follow-up questions will ask if the sale included employee stock.  When you answer 'yes', additional questions will come up.

Use the instructions in the following TurboTax article to get started by entering your Form 1099-B:

Where do I enter a 1099-B?

@K-Girl

My RSU's got vested and the employer withheld taxes on them. However, I did not sell any of the stock units during the entire year. My Brokerage did not provide me 1099-B saying that there is no sale, I am not sure if that is correct since my employer already withheld taxes (stocks) and I have remaining shares.

Is the brokerage supposed to provide me 1099-B in this case ?

If you did not sell stock, there would be nothing to report. However, if the company sold shares to cover taxes, it would seem there should be a sales statement. If the company retained the shares to cover taxes, then there was no sale.

I want to urge you to create a financial notebook that is kept separate from your tax return. Keep it safe and each year, add your year-end statements from all your financial accounts plus a copy of your W2’s, your  carryover information, and proof of your basis in your various investments. You must keep tax records  from the time you vest/purchase until sold/ loss used plus 3 years. It is very easy to lose track of disallowed losses / carryforwards/ basis.

@vitan_6

I have a similar question as well.  I have RSU's that vested in 2021.  I did not sell any but the company did sell off shares to satisfy the taxes (Federal, State, FICA, Medicare, etc.).  All income and taxes are reflected in my W2.  There is no 1099-B for the RSU tax sale.  What gets entered into Turbo Tax other than the info on the W2? 

1. Do I need to show the sale of the shares withheld for taxes in the Turbotax Investment Income section or is this not required since it is already in the W2?

2. If it must be shown in the above section, Is the cost basis only for the shares sold to satisfy the taxes (in other words proceeds equal costs to cover taxes)?

1. Yes. Since shares were sold, there should be a 1099-B. Since they don't have to be issued until Feb 15, you may not have received yours yet. The post office has 2 weeks to deliver them before you begin asking for another.

2. No. Careful, the cost basis is the Fair Market Value on the date the RSUs vest. Your box 1 compensation includes the vale at vesting for all shares. You will use the number of shares sold times the value at vesting.  Employees have the option of when the RSU is reported in their income. This makes you responsible for tracking your basis.  See Employee Compensation, RSU in Tax Cuts and Jobs Act: A comparison for large businesses and international taxpayers.

@IS5013  Also, my answer right above your post about the financial notebook is crucial to you to keep straight the shares, dates, and dollar amounts.

I have all of the info on the fair market value, what was sold for taxes, etc. even though I don't have a 1099-B.  What exactly do I include step by step please for the below boxes.

1d Sales proceeds - is this only the shares that were sold for the taxes (179 vs. 437 released)??

1e Cost or other basis - Fair market value?

Box 4 Federal Taxes Paid - do enter the fed taxes paid even though it is on the W2 already?

Box 16 - same above question

TT is so very confusing on RSU's

If you did not sell your RSUs there is nothing to report.  Keep your records so that when you do sell your RSUs, you can refer back to these records when you prepare your return.

Assuming you sold your RSUs, Box 1d should contain the sale proceeds from the RSUs that you sold.  In other words, it should not include the number of shares that your company sold to cover your tax withholding obligations.  Referring to what you posted, if the company sold 179 shares to cover the taxes, and you sold 437 shares, then Box 1d should include the proceeds from the sale of the 437 shares.  

Now, for Box 1e, this can be tricky.  Box 1e contains your cost basis.  Your cost basis is the value of the shares on the day they vested with you.  By vesting we mean the day the RSUs belonged to you and you could sell them or hold them without restriction.  Because we are dealing with RSUs, you need to determine the price per share.  Based on your question it seems as if you know what the share price was on the day the RSUs vested with you.  Therefore, multiply the share price on the day the RSUs vested times the number of RSU shares.  That is your cost basis.  Don't include the number of RSU shares the company sold to cover your tax withholding obligation.  

Regarding the RSUs your company sold to cover your tax withholding obligation, that amount has already been included on your W-2.  Therefore, enter your W-2 information into TurboTax as it appears on your W-2.  W-2 information is entered into TurboTax online in the Income & Expenses section, or if you are using TurboTax cd/download, in the Wages & Income section. 

@IS5013

Thank you.  You answered my question and was very clear in your explanation.

Disclaimer: I am not a tax professional.

TLDR: The easiest way I found to find adjusted cost basis with sales that have 0 in the cost basis, like RSU or ESPP, is to use supplemental information supplied by the stock broker. 

See if your bank or broker (or administrator) provides a supplemental document for your stock plan.  This will have more details about each transaction such as "adjusted cost basis"

I entered each sale manually and indicated that the sale was for RSU/Stock Plan using the prompts.

With this doc it was very easy to select "I need to adjust my cost basis" and then refer to the supplemental doc for each sale to enter the adjusted cost basis.

Probably a good idea to verify the numbers in the supplemental info with the calculations mentioned in above posts, but if you trust your broker's Information systems , and the supplemental info, using the form saved me a lot of time and headache.

My RSU administrator sold shares to cover taxes as shares vested.  These sells do appear on the 1099B.  Since they are already accounted for in my W2 can I ignore these lines?  I imported the entire 1099B into Turbotax, so I would just delete them?

No, do not delete the 1099-B that shows the stock sales for your RSU’s. Even though the stocks you received from your RSUs are reported in Box 1 of your W-2, you must report income based on the fair market value of the stock,  which is why you need to include the information on your 1099-B. You should have received paperwork from your administrator that indicates the fair market value the date that your RSU’s vested.  To review your 1099-B, open TurboTax, and search for 1099-B in the search box. Select jump to 1099-B and follow the instructions on the screen.

Please review the TurboTax articles What are restricted stock units (RSUs) and how do I report them? nd How to Report RSUs or Stock Grants on Your Tax Return for further details and instructions.

Hi, sorry I am not talking about deleting the 1099B entirely.  I am only referring to the stocks sold to cover taxes. For example, if I vest 100 shares, the rsu admin will estimate the taxes owed and sell the equivalent number shares (lets say 35) automatically to cover taxes.  Those 35 shares appear on the 1099B as stocks sold, but the proceeds are withheld.  

I don't  think these articles cover how to treat these 35 shares in Turbotax.  If I leave these in like a normal sale, I will be taxed on the sale.     

@jshen95 --

The value of the 35 shares sold for taxes should be included in Box 2 of your W-2, "Federal Income Tax Withheld".

Hence you actually are credited for that sale.

Thanks! the 35 shares still show up on my 1099B though.  So just don't enter the 35 shares from the 1099B into Turbotax? 

Enter the 1099-B into TurboTax.  Just be sure you enter the correct cost basis for the shares.  (The per-share cost basis is the total compensation you received for them, divided by the gross number of shares you received.)

Since the shares were presumably sold for taxes on the same day they became vested, there should be little or no capital gain or loss from the transaction.

Thread has been helpful, however I'm getting stuck on one point of logic here.  My situation is that I sold some RSU in 2022 and received the requisite 1099b and w-2 from my former employer to account for the 15% discount.    I fixed my cost basis based on the supplemental form received from my brokerage, and went through the prompts to enter shares vested (6) and shares traded/witheld to pay taxes (2).  However, when I enter in the number of shares withheld for tax it increases my tax liability.  How can this be?  If shares were sold to pay taxes why would I owe more than if they were not.   

First, let's explain how and why taxes are withheld from shares of stock by your employer. Income taxes are withheld upon delivery. Many companies automatically sell your shares to cover the tax withholding without giving you a choice. Some companies may offer you different ways to pay withholding taxes including but not limited to paying by personal check or deducting from your paycheck directly. Usually the amount of income taxes that are withheld for any purpose are reported on a W2. 

Now in the end, your total W2 withholdings(including what was withheld for the shares of stock) are reported in Box 2 of your W2. As a result, your total tax liability is reduced by all income tax that was withheld by the employer.  So the income tax that was withheld from the shares has already been reported.

Now, selling shares of stock for whatever reason is taxable income whether it be a long term capital gain or a short term gain. This will increase your tax liability in your return but remember the tax that was withheld by your employer is already reported in your W2 for the year and is reflected in Box 2 of the W2 that reports ALL income taxes withheld. 

@HerpDerpson 

First, let's explain how and why taxes are withheld from shares of stock by your employer. Income taxes are withheld upon delivery. Many companies automatically sell your shares to cover the tax withholding without giving you a choice. Some companies may offer you different ways to pay withholding taxes including but not limited to paying by personal check or deducting from your paycheck directly. Usually the amount of income taxes that are withheld for any purpose are reported on a W2. 

Now in the end, your total W2 withholdings(including what was withheld for the shares of stock) are reported in Box 2 of your W2. As a result, your total tax liability is reduced by all income tax that was withheld by the employer.  So the income tax that was withheld from the shares has already been reported.

Now, selling shares of stock for whatever reason is taxable income whether it be a long term capital gain or a short term gain. This will increase your tax liability in your return but remember the tax that was withheld by your employer is already reported in your W2 for the year and is reflected in Box 2 of the W2 that reports ALL income taxes withheld. 

@HerpDerpson 

Thanks for the response @DaveF1006   But there's one piece I'm still unclear on.  When indicating the number of shares that were sold to cover tax burden at vesting why does my tax burden go up in the software?  I would still think having not done so should be the only reason taxes would increase or a refund would go down in the software.

 Is it that money withheld at tax time via the W2 should be treated differently depending on if it's from RSU tax sales?  For full disclosure they were not held for the full two years, and therefore are non qualified deferred comp.   

Just want to make sure I'm being taxed fairly and now some kind of double taxation.  

The amount you are being taxed on as income on your W-2 is the difference in price you paid for the stock and the market value on vesting date (the employee discount, taxed as wages). 

The amount you may get taxed on for your 1099-B is the difference between market price on vesting date and market price on sale date (generally a small amount) which is reported as Capital Gain, rather than regular income. 

It's important that you enter the correct Cost Basis when reporting the sale of shares from your 1099-B.

You are not being double-taxed on the same income; it's two different 'incomes'. 

Here's more info on RSU's.

@HerpDerpson