topic RSU vesting period split between the US and Sweden in Investors & landlords

RSU vesting period split between the US and Sweden

andreasbrinck — Sun, 07 Mar 2021 18:03:19 GMT

I have what I think is a very unusual situation. I moved to the US from Sweden in the summer of 2019, but stayed within the same company. Last summer I had shares of RSU vesting. These shares were awarded in Sweden in 2018. Now for the unusual part, the Swedish Tax Agency considers 50% of these RSU to be Swedish income , since half of the time between award and vesting was spent in Sweden. However, here in the US 100% of these RSU are considered US income.

This is not a typical situation of double taxation. I am declaring my Swedish income for these RSU on my US tax return and claiming a foreign tax credit for the tax already paid in Sweden. The problem is this does not cover the entire situation since after this maneuver I am left with having to pay taxes on 100% of the RSU here in the US.

To boil it down: I will have paid taxes both in Sweden and the US on 50% of the shares, and taxes in the US for the remaining 50%.

Is there anything I can do, or will I just have to accept the extra taxation?

Re: RSU vesting period split between the US and Sweden

DavidD66 — Sun, 07 Mar 2021 23:18:48 GMT

Yes, you are being taxed by both Sweden and the US on 50% of the income from the RSU vesting, but you will also receive a credit for the foreign tax paid t Sweden. The foreign tax credit is to remedy the double taxation.

Re: RSU vesting period split between the US and Sweden

andreasbrinck — Mon, 08 Mar 2021 00:00:52 GMT

Hi, the tax credit doesn't remedy the situation. Without the tax credit I would have been taxed thrice:

In the US as income
In the US on the Swedish income
In Sweden on the Swedish income

The tax credit removes item (2) above, but leaves (1) and (3). The problem is that the same RSU has been reported as income in both the US and Sweden.

Re: RSU vesting period split between the US and Sweden

Rick19744 — Mon, 08 Mar 2021 00:13:44 GMT

You are not interpreting this correctly:

You are correctly being taxed on 100% for U.S. income tax purposes. U.S. taxes your worldwide income.
Then you are taxed on 50% in Sweden.
Then you get a foreign tax credit on your U.S. income tax return for the 50% tax that you paid to Sweden.
While credits don't always offset $ for $, this is what it is.
So essentially the foreign tax credit is meant to alleviate the Swedish tax paid.
So no double tax

Re: RSU vesting period split between the US and Sweden

andreasbrinck — Mon, 08 Mar 2021 00:50:05 GMT

Hi again! Yes, I think I am interpreting it correctly. You are only considering the US tax system, and yes, from that perspective I am not being double taxed. This however does not take the taxes I am paying in Sweden to the Swedish Tax Agency into account. Again, the problem is that the same RSUs has been reported as income to the tax agencies in both Sweden and the US ("Skatteverket" and the IRS).

Re: RSU vesting period split between the US and Sweden

xxisober — Sat, 18 Dec 2021 06:28:54 GMT

Hi，

Same problem happened to my friend. May I know how did u solve it at last？