Vested RSUs included as W-2 compensation; shares withheld for taxes not included in W-2

[rainman17]

I had a few lots of RSUs vest in 2019, but I did not sell any of them, so my brokerage did not send me a 1099-B.

It appears that my company included my vested RSUs as compensation but did not include the shares it withheld for taxes in the income tax paid boxes of my W-2. How do I account for this?

[RobertG]

You don't have to account for it.

RSUs are taxed when they vest. Income is reported on the W-2 and shares are withheld to cover tax on the shares. Nothing else is reported on the tax return until the shares are sold.

A 1099-B is issued when the shares are sold. The basis of the shares is the market rate of the shares at the time of vesting that was reported as income on the W-2. When the sale is reported there will be a capital gain or loss.

[rainman17]

Thanks for the quick reply. Isn't that double taxation, though? I've already had shares withheld to pay the taxes to Uncle Sam, yet I have to pay out of my pocket as well? Shouldn't the value of the shares withheld to pay the taxes be reported on my W-2 right now? Because they're not.

[DavidD66]

RSUs do not always result in a Form 1099-B being issued for the "units" withheld to pay taxes.  RSU are NOT shares of stock, rather they represent shares of stock.  If your employer withholds units to pay tax, the stock is never issued, so it is not sold.  Even if this is the case, the vesting of RSUs is a taxable event, and the value of 100% of the RSUs that vest should be reported as ordinary income to the employee.  If your employer did not report the value of the units withheld to pay your tax, they made and error.  I suggest you talk to your employer about correcting this.

[NCperson]

go back to the specific pay stub where the RSUs were accounted for,

What you appear to be stating is the paystub increased your wages to reflect the value of the shares that were sold, but the tax columns (federal, state, FICA, medicare) were not increased.  If that were true, you would have received cash from your employer.