RSU Treatment by OR as an out-of-state hybrid worker

[rwturner]

I live in WA and commute to OR 1 day a week, so am subject to paying OR taxes on 20% of my earnings. Where this gets a little fuzzier is around non-wage income. How do I treat Restricted Stock Units that change value between grant and distribution date?

For example:

RSU grant with a FMV of $10k at grant date

1 year later, it vests and is distributed, but stock has gone up and now is worth $12k

What is subject to OR taxes? 20% of the FMV at grant date or distribution date? If the latter, then would I also be subject to OR taxes on any capital gains realized at sale?

[DavidD66 · Accepted solution]

Yes, you would owe Oregon tax on 20%, or whatever the actual percentage, of your income that was earned in Oregon.  As for your RSU grant.  It is not taxable until it vests, at which time the full amount is earned income.   That is the amount that is included in your wages and reported on your W-2.  In your example, that is the $12,000, of which 20% (or $2,400) is subject to Oregon state income tax.  Any capital gains realized upon the sale are NOT taxable by Oregon.