RSU Payout Not Included in W-2

[jlaveck]

I have a weird situation that I haven't seen listed yet.  Over the last several years, I've been granted RSUs.  In one instance, the RSUs were vested and paid out and reported as income on my W-2. In another instance, an RSU was paid out when the account was closed, and not included in my W-2 but added to 1099-B without a cost basis.  If I'm reading this right, the cost basis should be the same as the payout/proceeds, even though it's not listed on the 1099-B.  Is that accurate?  Thank you!

[MarilynG1 · Accepted solution]

Maybe.  If you sell the stock at a higher price than its fair market value at the time of vesting, you'll have a capital gain.

Click this link for more detailed info on How to Report RSUs or Stock Grants. 

[NCperson]

the stock price used to convert the RSUs to stock is the cost basis to be used when you eventually sell the stock

example:

RSU converts to stock: $10

stock cost basis: $10

stock price upon sale:$12

profit: $2

[smr17]

How do I document RSU income that was not included in my W-2? I did not receive a 1099-B when I sold it a month after becoming invested. I sold it for the same price as when it was vested. Does that mean I don't have any capital gains? 

[AmyC]

Correct, you would not have a gain, In fact, you may have a loss due to paying brokerage fees. 

RSU income is no longer required to be in your W2 in the same year as the sale. Your employer should have asked if you wanted your RSU reported when it vested. Was there a crossover between years with your vest and sale?

If all in 2019, it should be in your W2 and you should definitely have a 1099B from the sale.

Related:

What are restricted stock units (RSUs) and how do I report them?

Cost Basis Reporting FAQs | Internal Revenue Service

Tax Cuts and Jobs Act: A comparison for large businesses and international taxpayers

[smr17]

The stock vested in March 2019 and was sold in April 2019. The company is French. Could that be why it wasn't in the W2 and a 1099B was not received? I now have it listed as "Other income" on Schedule 1, line 8. Is that correct? There was no brokerage fee. So if I have no capital gain or loss, do I need to document anything else related to this activity on my 2019 taxes? Thank you

[TomYoung]

@smr17 

There are ways to get the compensation income included in your TurboTax income tax return, but first I'd suggest you talk this over with your payroll department.  The vesting is compensation and is required to be included in your income tax return as such, and "compensation" also generates the requirement for withholding of taxes. 

[smr17]

I tried to get a new W-2 with the payout included. I was told that payroll is done in the U.S. while the stock payment came from France. No new W-2 will be coming for me. 

[ThomasM125]

If you report the RSU sale properly in TurboTax, the ordinary income portion will be added to your wage income and appear on line one of your form 1040.

You need to find the "Investment Income" section of TurboTax and choose "Stocks, Mutual funds, Bonds and Other."

When you come to the "Choose the type of investment you Sold" option, and click on "Restricted stock Units" you will be given an opportunity to indicate that the income was not reported on your W-2 form, and when you do that it will appear as an addition to your wage income on your form 1040 as follows:

[smr17]

When I get to the section "type of investment you sold", I do not have an option for RSU. I am using TurboTax Deluxe so maybe that is why my options look different than the ones you posted. ?? Should I chose stocks? I tried this once before but it didn't seem like the appropriate way to document it since it later asks for the purchase price but I did not buy them. ??

[DaveF1006]

First of all, to report investment sales, you will need to be in Turbo Tax Premier.  I am surprised the program did not prompt you to upgrade.

Now, if you are using Turbo Tax online and before you enter any sales, select Stocks, Mutual Funds, Bonds, Other 

1. the first thing it is going to ask if you if you sold stocks, mutual funds, bonds, or other investments in 2019. Say yes
2. Then it will say OK, what type of investments did you sell? indicate Stock, Bonds and other
3. Then it will prompt you to enter some preliminary information.  After you do this, this next step is critical.
4. You will reach a screen that asks Tell us about your 1099-B sales for this XX account.  The first screen asks, "Do these sales include any employee stock?" If you say yes, when you start entering your stock information,  RSU will appear as an option under What type of investment did you sell? 

If you are using the software version of Turbo Tax, when you get to the screen where you start entering the stock information, select guide me step by step.  The first screen that will appear will ask if you have employee stock to report.  As with the online version, the program will prompt you to upgrade to Turbo Tax Premier.

[smr17]

Making progress thanks to your wonderful help. I upgraded to Premier and found the RSU option! However, I never found a prompt for me to click on to indicate that the income was NOT included on my W-2. ?? I entered the sales information, indicated there were no sales expenses, they were sold from 1 lot, vesting information, they were not split, and no reinvested dividends. What did I miss? Thanks!

[smr17]

Did some more digging around. I still didn't find the button indicating the income was NOT reported on my W-2. However, I did find the employee stock worksheet. Line 28 indicated the amount reported as compensation income for 2019. Currently, it has the total stock compensation. Should I manually change that value to $0, assuming it will let me do that? Waiting for your response before I do anything. Thanks

[TomYoung]

@smr17 

The problem here is that you didn't go far enough into the "Stocks, Mutual Funds, Bonds, Other" interview.  You can't simply stop when you're done entering trades.  Keep pressing "Continue", "Done" or whatever until you finally come to a page titled "Your Employee Stock Plan Results."  Answer "No" on that page and TurboTax will include the compensation on the correct line of the income tax return.

[smr17]

You are exactly correct!! Thanks so much to everyone who helped. 

Have a great weekend and stay safe.