RSU shares amount in W-2 Box 11

[amr54768]

Questions about how to report sale of RSUs to cover taxes and RSTK amount in box 11 of W-2.

For background:

* My employer gave me 500 RSU shares in 2015; 125 shares vest every year.

* 125 RSUs vested in 2018. E-trade sold 45 shares to cover taxes, reporting proceeds of $4232.45 to the IRS. I have not made any sales myself, it's only e-trade's automatic sell to cover taxes function. I did not receive any money directly from this sale.

* My employer listed $11547.50 on the W-2 in Box 11 as "RSTK". I did not receive any money directly.

The question:

In Turbo Tax, I filled out the Employee Stock Plan worksheets. At the end, it asks "On your Form W-2 (or pay stubs) from [employer], check that the following employee stock pan amounts were included in box 1 wages. " The computed amount = $11756.25

That $11k amount is on my W-2, but it's not in box 1 and I never received any cash. Do I check YES to this question?

If I check NO, the estimated refund goes from $1900 to me owing $600.

Am I right in thinking I should check YES to this question so that I'm not being taxed on money I have never actually received and I only need to pay tax when I actually sell those vested shares?

[NCperson]

background:

1) RSU are not reported as income until the restriction expires.  At that point, it is reported as ordinary income (wages) in your W-2.

2) then you are holding the shares (which as you state is a lower number than what you began with because some shares are sold to pay taxes)

3) those remaining shares are not reported until you eventually sell them. 

if the $11k is not in box 1, then your are to answer 'no'; all $11k is taxable income to you (and would still be so if in Box 1).  

YOU DID RECEIVE THE MONEY IN THE FORM OF THOSE 125 SHARES

That $4,232 'reported to the IRS" - can you go back and look at that - that is probably taxes withheld for federal, state, social security and medicare. It should be reflected in the W-2 under withholdings.  it's not 'proceeds'. 

So the way I look at what you stated is 

1) you received earned income of $11, 547.50 which was 125 shares at $92.38 per share.  that is taxable now

2) 45 shares were sold at the same $92.38 or $4157.10 (probably some rounding somewhere) to satisfy a number of taxes and these taxes are already reflected in the withholdings on your W-2.

3) you own 80 shares outright and when you ever decide to sell them, your cost basis is $92.38 per share. Sell for greater than that price and you have a gain; lower than that price and you have a reportedable loss.  You already paid the taxes on the $92.38 per share as part of the $11k

make sense?

[amr54768]

Thank you for answering my question. It wasn't the answer I was hoping for, but it is the one I suspected.

And thank you for the info on the cost basis. I'll make sure to keep track of that number for when I can dump these stupid shares.

[NCperson]

and since those 80 shares are no longer restricted, you can dump them at any time!