Is the amount of tax withheld for RSUs automatically added to the Federal Income tax withheld when calculating what taxes are owed? It would seem it is not.

[ThomasM125]

I believe what you mean is that you sold some of your restricted stock units (RSU's) when you took possession of them to pay in estimated taxes due on the resulting income. If so, then yes,  the tax withheld should be reported on your W-2 form in box 2 automatically. As such, it will appear on your form 1040 on line 25(a) and you will get credit for it on your federal tax return.

You can inspect your pay stub to help verify that this happened. 

[MattTaxShadow]

Thank you. I think the problem is Turbo Tax isn’t recognizing the amount of estimated taxes paid when it imports my W-2. It is just in a box I had to label Other.

[MattTaxShadow]

@ThomasM125 i actually haven’t entered those automatic tax RSU sales yet because I don’t have my 1099-B handy. When those are entered will TurboTax do some accounting around this and reconcile taxes already paid. Or are you saying the W2 already reflects the correct Federal Income tax withheld? Thanks for your responses!

[MarilynG1]

Yes, the W-2 already reflects the correct Federal Tax withheld.  The taxes withheld on your RSUs should be included in the Federal Tax amount shown on your W-2.  It does not have to be shown as a separate item on your W-2.   You can check this by looking at paystubs before and after the RSUs were sold to see the increase in wages/tax withheld.

When you receive your 1099-B you may need to adjust only your 'Cost Basis' amount if it is not correct.  

Click this link for more info Cost Basis. 

[MattTaxShadow]

Thank you both. When I figure this out I will report back with what will likely be “user error”.