FICA Tax and RSU's -- Over 55 Employee

[ChicagoJ]

Hello, Team!!  In 2024 I earned RSU's at my place of employment.   No shares were vested in 2024 (the first 1/3 just vested in March 2025, and the second 1/3 will vest March 2026, etc.).  However, I received notification from my employer in 2024 that because I am over 55 ("retirement eligible" -- my wife thinks otherwise, LOL), I am no longer subject to forfeiture of the award.

They also told me:  "Once your awards are no longer subject to forfeiture, the IRS requires payment of FICA (Social Security and Medicare) taxes by the end of the calendar year for any unvested Restricted Stock Unit (RSU) award. FICA taxes in connection with your unvested RSU awards granted in 2024 will be collected via “net settlement”. "

I did NOT receive any additional paperwork or tax forms for 2024 tax season from my employer on this matter, but I did see that the FICA seems to have been addressed on my 2024 W-2 paperwork.  I wanted to verify that I was not supposed to receive (or request) any additional paperwork.

For RSU's, is everything done via the W-2?  Meaning, when I do next year's tax returns, I will have 1/3 of my RSU's that are vested.  Let's assume I do NOT sell any of these shares.  If that is the case, would my W-2 "tell the story" of the RSU's that have vested (and any applicable FICA)?  If I were to sell the vested RSU's, I would receive a form to file, correct?  Is it a 1099-B?  In terms of doing my taxes with TurboTax, are there any other considerations or is everything covered by the entering of my W-2 (as long as I do not sell the shares)?

Because I am pre-paying the FICA, how can I make sure that I will not double-pay in future years?  

Huge thanks!  My income is typically very straight-forward and although I appreciate my employer providing me with the RSU's, they are throwing me for a loop! Thanks for any assistance you can provide.

[DavidD66]

When you have Restricted Stock Units (RSUs) that vest, it is a lot like getting a cash bonus.  The total amount (market value of the RSUs) is considered ordinary income and is subject to tax withholding, including FICA.  In order to fund the tax withholding, a number of RSUs with a value equal to the tax are withheld (i.e. you don't get the shares of stock represented by those units).  At that point, it is just a W-2 transaction.  For the RSUs that are not withheld to pay tax, you receive shares of stock.  You cost basis in the stock is the value of stock on the day they vested.  When you sell your shares, you will need that cost basis, because the brokers almost always report either no cost basis or the wrong cost basis.  

In your situation, since the FICA had to be paid in advance, and was paid via net settlement, it sounds like they paid the FICA and withheld RSUs equal to that amount.  The value of the RSUs withheld and the FICA tax paid should be reflected on your W-2 earnings and FICA.   

You should be able to get a statement of your RSU account from your employer that shows all the activity.