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New Member
posted Mar 30, 2023 12:14:40 PM

RSU's Reported in box 11 Nonqualified Plan

On my W2 my employer reported my settlement of my RSU's in Box 11 under Nonqualified Plan.  This year, Turbo Tax is asking me the following:

 

Did you take money out of your nonqualified pension plan?
 
We just need to check whether the $______ in box 11 is money you contributed to your plan, or if it's money you took out of your plan.
 
Yes, I took this money out of my nonqualified or Section 457 plan.
No, this is money I contributed to my nonqualified or Section 457 plan.
 
Not sure what to click as it doesn't feel like either.  Not sure it makes a difference in how you respond.  Anyone have advice on this?

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1 Replies
Expert Alumni
Mar 30, 2023 1:34:53 PM

If your employer included the value of your RSUs in box 11, then it appears your RSUs represent non-qualified deferred compensation.  The fact that your RSUs are deferred compensation means that payment is made or could be made, in a calendar year later than the year in which the awards vest.  Section 457A(a) provides that any compensation that is deferred under a nonqualified deferred compensation plan of a nonqualified entity shall be includible in gross income when there is no substantial risk of forfeiture of the rights to such compensation.

 

If your RSUs have vested, and there is no longer a risk of forfeiture--meaning that you can dispose of them however you wish--then the income represented by the RSUs has been paid to you.  If that is the case, then you should answer "yes" to the question you included in your post.  If the RSUs have not vested, and payment has been deferred, then you would answer "no."  

 

To verify that the RSUs have vested, you might consider contacting your employer just to make certain that you now own the RSUs free of any limitations.  You might also verify that the RSUs have not already been included in your wages.  If the RSUs have already been included in your wages, you don't want to pay tax twice on the same income.