Question on RSU and W2

6 replies
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Hello, all.

I have a question. I see my Gross Pay has RSU included, but i don't see any box that tells about it (box 14).
Just wondering whether this is correct or what should i do ?

Not A Product Question

DawnCAnswer

Employee Tax Expert

Also to add into this question. When RSUs got vested portion of stocks were withheld to pay taxes (Federal/SS/Medicare/State/VDI). Shouldn't that paid taxes be counted towards total taxes paid for the year?

Yes, if stocks were sold to pay taxes, you should have a 1099-B that reports the sale. The vesting generates taxable compensation. It is usually reported in Box 14 (with a code U or sometimes just RSU), but it doesn't have to be. Once the stock has vested, the fair market value of the stock gets reported as ordinary income, usually in box 1 of your W-2. In some companies, employees can earn dividends from unvested RSUs — these are also reported in box 1 of their W-2 forms.

After vesting, you own the stock outright. Should you later sell those shares, you'll get a 1099-B which will report the gain or loss from the sale. Or if you had shares sold to cover the taxes. When you enter the 1099-B using the TurboTax Employer Stock sale interview, TurboTax will make sure that the compensation portion is reflected in the cost basis of the sale. If the shares were sold the same day, you may have a small loss reported from the 1099-B, but the taxes are included on your W-2.

What are restricted stock units (RSUs) and how do I report them?n TurboTax?

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DawnC

Employee Tax Expert

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. If none of the stock was sold, you don't have to do anything. But when you do sell the stock, the additional compensation that is included on your W-2 will be factored into the gain or loss that is reported then.

After your stock vests, gains or losses from future sales will be reported on Form 1099-B, like any other stock sale. The amount of compensation added to your W-2 will be part of your cost basis when the stock is sold.

Please see Paying Your Taxes at the bottom of How to Report RSUs or Stock Grants on Your Tax Return.

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nizami22247Author

Level 2

Thanks for the reply. I get that. I was more wondering if i see RSU being added to the total amount of Gross Income, but i don't see it anywhere on W2 boxes, is that alright? Shouldn't that be usually reported on box 14 ?