Federal and CA Taxation on RSU vested due to IPO after leaving US

Mohit · ‎December 5, 2025

Hello community,

I worked for a startup in US for 2 years from beg of 2021 to end of 2022. I was awarded some rsu from the company and those got time vested while i was employed there, since company was private no tax was withheld in this timeframe. I left US in beginning of 2023 and left the company also.

Company is IPOed in mid 2025, so these rsu are finally liquid now. Because of going public, these all getting taxed on 2025. Company will give me W2 this year and they have withholded all the federal and CA taxes based on these rsu. I do not have any other income from US this year apart from these RSUs.

How do i need to report this on 1040NR and 540NR?
Will i be taxed on full amount or I've to only pay for, on fraction of amount? As in for 2 years i was in US. And 2.5 years i'm out of US at vesting date. Probably 2/4.5 of total amount. If i can do that how will this be reported for both federal and CA?
Or is it fully exempt and i can claim full refund (which i don't think its possible, but still just in case)
Do I also need to pay medicare, social security and ca vpdi taxes?
Since i'll giving tax in my home country as well for this, can i fill form 1116 and take some credit back?

Any help and guidance will really help me plan it forward. Thanks in advance.

These are "double-trigger RSU". The shares get really vested until a liquidity event like an IPO.

https://carta.com/learn/equity/rsu/single-trigger-vs-double-trigger/

DaveF1006

Since the RSU's vested while you were abroad, you will need to allocate your W2 between US and non-US sources since the W2 may report the full amount and not separate it into US-sourced income.

You will file a 1040 NR that is US-sourced income. For California, you would only report California-sourced income for the period of time you lived in California. In determining your allocation, you will use work days and not years or months. The formula in determining your US-sourced income is total number of of work days divided by the total work days in the vesting period.

Why is this important? When you file your California return, you will need to attach a statement showing the math on how you determined how many working days you worked while a California resident. California is strict about using working days and not months or years. It must be a precise calculation.

No, it isn't exempt. You are responsible for reporting your US income and California income when you were a resident of both jurisdictions.

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