Taxes on RSUs granted in New York that vest in Florida

[telljc]

I've been granted RSUs that vest over 4 years in New York.

The first 1/4th vests after 1 year. Then the rest vests monthtly for the remaining 3 years.

I'm trying to determine what NY will tax if I move to Florida within the first year (before they vest) or in the third year.

[MarilynG1]

Yes, when your RSU vests it would be  considered unearned income in the state where you reside when you receive it.

When you receive an RSU, you don't have any immediate tax liability. You only have to pay taxes when your RSU vests and you receive an actual payout of stock shares. At that point, you have to report income based on the fair market value of the stock.

Click this link for more info on RSUs or Stock Grants.

This link gives details on How to Allocate Income for a Part Year Resident . 

[telljc]

I know but my understanding is NY tries to take a percentage based on how many days in the 4 years I was in NY for, even if they vest later. Is that not the case?

[telljc]

Once it's considered earned, how much will NY try to take after I've left?

[ThomasM125]

Basically, the way it works is you will divide your income from New York sources by your total income, then use that percentage to allocate your New York tax.

For instance, you report all of your income for the year as though it was earned in New York and take the deductions and credits allowed as if you were a New York resident to arrive at your New York taxable income, and then calculate your income tax like you normally would. Then, you multiply the tax by the percentage of income earned in New York to arrive at your New York income tax. 

[slori1982]

One follow-up question to this topic. If the individual subsequently sells the shares that were included in compensation for a capital gain, is that capital gain subject to tax in NYS?

[TomD8]

@slori1982 --

A capital gain from the sale of stock is taxable by your state of residence at the time the sale is made.