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New Member
posted Jun 6, 2019 4:04:50 AM

My form 1099-B from morgan stanley does not show any Taxes withheld. However, they did hold stocks to cover taxes. Does this sound like an error?

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1 Best answer
Level 13
Jun 6, 2019 4:04:51 AM

No, almost certainly it's not.  I'm going to guess that the stock sold was received through some Employer Stock Incentive program like a NQSO, RSU, etc.   In these situations the cash for the stock sold "for taxes" is passed back to the employer, who pays the governments(s) and then sprinkles the taxes throughout your W-2.  Ask your payroll department if you are unsure.

If a broker actually withholds - called "backup withholding - then that withholding must be reported on Form 1099-B.

Tom Young

3 Replies
Level 13
Jun 6, 2019 4:04:51 AM

No, almost certainly it's not.  I'm going to guess that the stock sold was received through some Employer Stock Incentive program like a NQSO, RSU, etc.   In these situations the cash for the stock sold "for taxes" is passed back to the employer, who pays the governments(s) and then sprinkles the taxes throughout your W-2.  Ask your payroll department if you are unsure.

If a broker actually withholds - called "backup withholding - then that withholding must be reported on Form 1099-B.

Tom Young

New Member
Jun 6, 2019 4:04:53 AM

Thanks Tom. A few additions - The stock was received as RSUs. Morgan Stanley does show line items under "Withhold to cover". Is that same as your "backup withholding"

Level 13
Jun 6, 2019 4:04:54 AM

NO.  I say that with EMPHASIS because you've already said that there are no taxes reported on your 1099-B.